Tamar Valley Dairy has been backed by creditors to continue production, in spite of its short-term liquidity problems.
According to the Mercury, Tamar Valley Dairy director Guaraci Matteo explained that the company called creditors in to explain the liquidity problems. Following a discussion and a vote, the creditors offered their support for the yoghurt producer.
Matteo confirmed that there was no sunset clause on the support and none of the company’s 100-plus employees would lose their jobs.
Tamar Valley Dairy was not in administration or receivership and had simply called the meeting to keep creditors informed.
"We will review the situation from time to time and keep working closely with them but they have been working with Tamar Valley Dairy for 15 years so there was no need for drastic action," he said.
The problems stem from a planned $20 million investment which has been delayed. The investment involves a new factory and is intended to allow the company to supply Coles, Woolworths and Fonterra with 360 tonnes of yoghurt a week.
Despite reported offers from interstate firms to take between $5 million and $8 million in equity, Matteo said there would be no changes in ownership or shareholding of the company.