At least $50 million gone at Harvey Norman with no real explanation after its dairy investment, Coomboona Holdings went into receivership.
It comes after Harvey Norman’s profit took a $20.7 million before tax impairment from the Coomboona joint venture in its December half year results in February.
Creditor National Australia Bank appointed McGrath Nicol as receiver and manager of Coomboona Holdings after the farm’s directors – who include Harvey Norman chairman Gerry Harvey – hired Ferrier Hodgson as administrators last Friday.
Harvey Norman, which paid $34 million for its 49.9% stake in Coomboona in 2015, announced the moves on Monday without giving further details.
Harvey Norman shares fell 0.2% to $3.63.
Analysts had long considered the dairy acquisition odd because it was unrelated to Harvey Norman’s core retailing business.
Coomboona owns land and farm assets in the Goulburn Valley in northern Victoria, including dairy farm operations, and a pedigree breeding and genetics division.
Dairying in that part of the state hasn’t been all that happy with losses and a takeover for Murray Goulburn, the industry giant.
The Coomboona business has incurred mounting trading losses and Harvey Norman said in last month’s interim report that it was in dispute with joint venture partner Eternal Sound on matters including Coomboona’s future direction. Harvey Norman had also demanded that Coomboona repay $18.5 million in debt to Harvey Norman.
Harvey Norman gave no explanation for its interest in Coomboona when it first notified the Australian Securities Exchange of its interest in 2015.
