Goldman Sachs seeking buyers for Cedenco, which owes ANZ NZ$46 mln

By Gareth Vaughan The receiver of Cedenco Foods, which owes ANZ National Bank about NZ$46 million, has recruited Goldman Sachs JBWere to help sell the food ingredients producer. KordaMentha’s Brendon Gibson told interest.co.nz the sales process, being run by Goldman, was now underway with a “wide range of people” having expressed interest in Cedenco. Indicative bids are due by April 28 with interested parties able to bid either for Cedenco’s combined New Zealand-Australian operations or for the two units separately. “We’ve got good interest in the business and we’ll see how that pans out,” Gibson said. ANZ appointed KordaMentha on November 9 last year after Cedenco defaulted on loans and due to concern over governance and ownership issues as United States authorities moved to lay fraud charges against Frederick Scott Salyer, former owner and chief executive of Cedenco’s parent company, SK Foods International. KordaMentha’s first report says ANZ was owed about NZ$46 million when the receivers were appointed. Unsecured creditors were owed about NZ$3.4 million and employees NZ$641,000. Cedenco is understood to produce annual earnings before interest, tax, depreciation and amortization of about NZ$20 million with one estimate of its value put at between NZ$80 million and NZ$100 million. Incorporated in 1991, Cedenco produces fruit and vegetable powders, purees, pastes, retorted and frozen vegetables for domestic and international customers from operations in Gisborne and the Hawkes Bay. In Australia Cedenco operates a tomato processing plant in Echuca, on the banks of the Murray River in Northern Victoria. It also has a customer support office in Tokyo. SK Foods reacted to November's receivership in a statement issued by law firm Kensington Swan saying it aimed to seek legal redress from ANZ, claiming the bank’s decision was without justification and it had breached an agreement with Cedenco. This week, however, Kensington Swan referred questions to Lowndes Associates lawyer James Nolen. Nolen said the extent of the action at this point involved SK Foods trying to obtain some documents from the receiver in relation to "certain financial information." He said he didn't have authority to comment further. Salyer, meanwhile, was arrested by FBI agents on February 4 as he arrived at New York’s John F Kennedy International Airport on a flight from London. Facing fraud charges over an alleged scheme to dominate the market for tomato paste and other processed vegetables, Salyer is now in California’s Sacramento County Jail having reportedly surrendered his passport and pilot's license as he struggles to raise the bail ordered by a judge to ensure he doesn’t flee the country. His lawyer, Malcolm Segal, has told US media the charges are unfounded. However, the LA Times quoted Benjamin B Wagner, the US Attorney in Sacramento, saying: “This would have to be the biggest case involving fraud within the agriculture industry that we’ve had in many years." Federal prosecutors allege SK Foods used about US$330,000 in bribes from 1998 to 2008 to subvert competition and clinch deals to sell tomato paste, peppers and other products to companies such as Kraft Foods, Safeway and B&G Foods. This was first published this morning in our Daily Banking and Finance newsletter, which is for our paying subscribers. Find out more here.