Hamilton Locke is thrilled to have assisted AgConnex Pty Ltd (formerly Australian Grainlink Pty Ltd) (AgConnex) with the restructure and purchase of the Grainlink business based in Griffith, NSW. Grainlink was a bulk grain storage and grain trading business that was very important to the local community in the Riverina region.
On 1 June 2023, Grainlink was placed into voluntary administration due to ongoing disputes at a shareholder and director level. AgConnex, a related entity of the group, began immediately working with the administrators appointed, Quentin Olde and Liam Healey of Ankura to ensure minimal disruption to the business by providing ongoing funding to Grainlink and commencing negotiations with the administrators to finding a solution for the group through a deed of company arrangement (DOCA).
These negotiations involved engaging with key creditors and grain customers, noting the situation was complicated due to a shortfall in third party grain held by the group. Due to the complexities surrounding the shortfall and the competing claims, the administrators sought and obtained an extension to the convening period. This delay, albeit necessary, did put pressure on the business and for some grain holders raised concerns around satisfying third party purchase contracts. In light of this delay, litigation was commenced during the administration by certain grain holders seeking orders on how the grain held by Grainlink was to be distributed given the competing claims between grain holders (noting ultimately this was dealt with under the DOCA with all grain holders kept whole).
At the second meeting of creditors held in late August 2023, creditors of each relevant Grainlink entity resoundingly voted in favour of the DOCA. The DOCA provided, amongst other things, for the Grainlink business to continue as a going concern, the grain holders to be kept whole despite grain shortfalls, the continued employment of the majority of employees and for unsecured creditors to be paid between a range of 20c/$ to 100c/$ (noting in a liquidation the return was likely to be closer to nil).
Creditors receiving less than 100c/$ under the DOCA are also entitled to a dividend that may arise as a result of further investigations to be undertaken by the now deed administrators of Grainlink. The DOCA was structured in a manner to allow the deed administrators to pursue any claims on behalf of the company, to the extent they are identified as this was a serious concern for many creditors.
A key term of the DOCA was for AgConnex to acquire the Grainlink business, which was completed shortly after execution of the DOCA. The business (under new name and ownership) has been trading since 21 September 2023 with a relatively seamless transition due to the support of the administrators and the key stakeholders.
Commenting on the transaction, Dean Sylvestro, director, and Geoff Barker, CEO, of AgConnex said,
“The purchase and restructure of the Grainlink business was a great outcome for AgConnex and the local community in Griffith. It was made possible through the assistance of Hamilton Locke throughout the process – both before and after the appointment of administrators. Their professionalism and understanding of what was required and their ability to communicate this to our business made the process go smoothly during very difficult circumstances at times. Their ability to negotiate outcomes with multiple counterparties and engaging with the administrators ensured a successful transaction. All members of the Hamilton Locke team, especially Nick, Mark and Ari, were approachable and available when we needed, and they helped us every step of the way”.
The team at Hamilton Locke was led by Partners Nicholas Edwards, Mark Schneider and Lauren Cloete and supported by Special Counsel John Poulsen and Lawyer Ariane Thierry. The team was also assisted by Special Counsel Timothy Zahara, Senior Associates Cormac Foley, Emil Conradie and Pravneel Chaudhary and Lawyer Hugh Farquhar.
