Murray River Group says it needs $30m to get back on track
Food & Agriculture
Beleaguered health food company Murray River Group has turned to broker Shaw and Partners to right the ship, saying it needs $30 million in order to “return the business to financial health”.
Murray River — an Australian dried fruit producer that operates along the entire supply chain “from the vines to the customer” — also said it has referred alleged improper conduct by a former staff member to authorities.
The company (ASX:MRG), which has been in trading suspension since the end of May, gave shareholders an update this morning on an operational review, proposed capital raising and investigation into alleged misconduct.
In a statement to the ASX this morning Murray River told investors it had appointed Shaw and Partners as broker for a proposed capital raise. An ongoing review of operations has set the expectation that a raise “in the order of $30 million is needed” to get the business back on track.
Much of the funds will be used, MRG says, to bring its vines to maturity and return them to full health and yield – its last two harvests have been smaller than expected. Leftover cash will be used as working capital to support the growth of its health food products.
Regarding the alleged misconduct, Murray River says it received a report from Korda Mentha relating to alleged improper conduct by a staff member who was suspended and has since resigned.
The affairs have been referred to the authorities for further investigation.
The company says it has “implemented improved practices and controls to ensure such activities cannot be repeated”.
The operational review has seen a high volume of turnover.
Several new appointments have been made at senior management level, including a new Head of Sales to arrest a slide after the majority of the previous sales team was removed by prior management in early 2018.
Murray River Organics CEO Valentina Tripp, who was appointed in April to turn the company around, told investors the turnaround was tracking well.
“It has been a difficult period operationally as the company has worked to realign its business with the needs of its customers,” she said.
“We are committed to working with our growers and suppliers to bring new better-for-you products to market.”
Murray River has also restarted the sale of its Fifth Street property, discussed long-term debt levels with NAB and was continuing to explore “all strategic options” with a “variety of potential interested parties”.