Sale hopes after dairy's $21m collapse

Brad ThompsonThe West Australian

WA's biggest single dairy producer had debts of more than $21 million when it collapsed, despite churning out more than 15 million litres of milk a year.

Lactanz Dairies, made up of four farms, four dairies and about 4000 milking cows over 2344ha near Scott River, hit the wall in June after New Zealand-based owner Rosmerta tried unsuccessfully to sell the business.

Documents filed by receiver Ferrier Hodgson show Rabobank is owed about $19 million, processor Brownes $1.5 million and unsecured creditors about $900,000.

Ferrier Hodgson partner Ben Johnson said there had been "quite strong" interest in the sale of Lactanz assets, with about a dozen parties making direct contact with the receivers.

Mr Johnson said a marketing campaign would begin this month and he was confident of a sale before the end of the year.

Brownes has a contract for the Lactanz milk supply until 2017 and owns the cows on three of the farms. It appears Brownes' cows will stay on the farms and the dairies will remain in production during the sales process.

"We have entered into a heads of agreement in the short-term to leave the cows on the properties," Mr Johnson said.

Lactanz was on sale for $27 million before being withdrawn from the market in May.

A dairy run by the Doyle family at Capel that is in the hands of receivers Ernst & Young is expected to be sold by the end of next month.

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