Receivers of collapsed Viking contact farmers
Receivers of collapsed Viking contact farmers
By Robert Harris
HUNDREDS of farmers affected by the recent collapse of Viking Cereals are being contacted by the companys receiver, KPMG, as it tries to assess the extent of their liability.
KPMG has confirmed that Viking Cereals incurred substantial losses from futures trading (Business, Apr 12), though the extent of the damage is still unknown. Most estimates predict £8-10m, though some suggest twice that amount.
The complexity of Vikings trading book means it could be some time before the true extent of the loss, and farmers exposure to it, is known. The only certainty is that the administrative receiver has to report to creditors within three months.
A briefing sheet, prepared by a liaison group set up by KPMG to answer farmers concerns, has been sent to members. An open day is also being held at Lincs-based Viking Cereals premises at Honey Pot Lane, Colsterworth, on Mon, Apr 22.
Company membership exceeds 400, and a further 100 are estimated to have been trading with Viking Cereals on the open market when it went into receivership. "However, the receivers will be speaking to those members who they believe will have been directly affected by the collapse of the company, particularly those who formed part of the long pool," the liason group wrote.
The extent of the shareholder loss is limited to that paid for shares in the company – understood to be one share/member worth £1. But the briefing sheet continues: "This restriction does not include any other monies that may be due to the company from individual members under the terms of the members agreement."
How individual farmers will be treated remains unclear, whether they are members of the long pool, which was actively trading when the company went into receivership, or those trading on the open market.
When contacted by farmers weekly, Allan Graham, joint administrative receiver, said: "The administrative receivers are continuing to take legal advice in this area and are working with the NFU and member farmers."
However, the briefing sheet attempts to answer some questions.
Some long pool members with grain on farm may have received some advance payments (believed to be up to a maximum of £50/t). The liason groups briefing sheet says the receiver will confirm amounts shortly.
It adds that KPMG will seek to arrange collection of stock and/or repayment of all these advance payments, plus any charges due. It may be possible to arrange for sufficient grain to be sold to meet the company debt, and returns for grain already sold will be taken into account when calculating the debt.
Other long pool members may have grain in Viking Storage Ltd. Although this company is not in receivership, the grain in the bins is affected. About 80 members are thought to have bought space. They can expect similar treatment to those with grain on farm.
Farmers who used Viking Cereals as a merchant who have not been paid for delivered grain may not receive anything. "It is likely that the monies owed will be treated as unsecured debt of the company… there appears, at the current time, to be little chance of receiving any monies for the grain, oilseed or pulses sold to the company," the statement says.
Other unpaid farmers who have not moved grain contracted to Viking Cereals should be able to sell it to another merchant, provided the standard UKASTA contract was used.
The position regarding farmers with seed contracts is unclear. The seed will have been committed to other merchants, so it may be possible for direct contracts to be issued, KPMG believes. *