The first Geon creditors’ meeting is underway in Sydney, against the backdrop of a company that is looking increasingly unstable.
The receivers say that unless paper supply is reconnected there will be immediate cost reduction strategies, meaning standing down staff and closing factories.
A letter sent to paper suppliers by the receivers on Friday says that the company’s paper supply is ‘almost exhausted’ and pleads with them to reconsider their ban on supplies, which the major paper companies have instigated until they have been paid.
The receivers say payment for ongoing supply is guaranteed, but payment for past supply is not possible, effectively telling the paper merchants they will have to get in line for what they are owed, which is liley to be $20m-$30m.
The merchants though are un-moved, mindful no doubt of the furore any re-supply would cause among the rest of the trade.
The creditors’ meeting will determine if a new administrator is to be appointed – PPB Advisory was appointed by owner KKR – and will appoint a committee of creditors for each of the Geon businesses.
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