Lane Walker Rudkin in receivership

News Release
28 April 2009

Lane Walker Rudkin Industries Limited placed in receivership

Brian Mayo-Smith and Stephen Tubbs, partners in BDO Spicers, have been appointed joint receivers and managers of Lane Walker Rudkin Industries Limited (LWR), effective today.

The appointment was made by LWR’s bankers to protect the financial position of LWR and its subsidiary Pod while issues facing the group are resolved. The LWR operations are currently unprofitable and have incurred a substantial increase in bank debt.

The group is owned by Christchurch businessman Ken Anderson, who purchased LWR in 2001 and Pod in 2007.

LWR is a diversified manufacturer of clothing and textiles with operations in several locations in New Zealand and Australia. Approximately 470 people are employed in textile, hosiery, underwear and garment factories in Christchurch; garment manufacture in Greytown and Pahiatua; a sock factory in Timaru; and a sports apparel factory in Brisbane.

Pod comprises fabric maker Designer Textiles International, clothing designer and manufacturer Michele Ann and Mollers Homewares, all located in Auckland.

While the receivers now have full control over all the businesses, Mr Tubbs noted that there would be a clear distinction in direction and day-to-day management between the LWR and Pod operations.

“Information available up to this point would appear to indicate that the Pod operations are profitable and cash positive,” Mr Tubbs said. “These operations will be ‘ring-fenced’ under a dedicated board and management structure reporting to the receivers. The current Chief Executive and Chief Financial Officer, Malcolm Walkinshaw and George Gin, will remain in place under these arrangements. We understand that the bank will provide additional finance to ensure the short-term liquidity and flexibility of the Pod businesses.”

Mr Tubbs said the position was less clear in regard to the LWR businesses, and there was a need for further information before any future action could be decided. “What we can be sure of is that the decision to appoint receivers has not been taken lightly – it has become unavoidable through a significant deterioration in the overall financial position of the LWR businesses,” he said.

Mr Tubbs said that until an assessment of the LWR operations had been made no decisions would be made about the ongoing trading operations. Meanwhile, continued support from employees, suppliers, customers and other stakeholders would be vital to maximise the chances of recovery for each business in the group.

Mr Tubbs said the receivers would make a further statement as soon as possible. “We understand the need of everyone involved with LWR – especially staff – for greater clarity on the issues raised by the receivership. I hope that we will be in a position to make further information available within the next two weeks.”

ENDS

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