A majority-owned subsidiary of Australia-based infant-formula exporter Jatenergy has called in receivers to recover monies owed by Nutritional Choice Australia, which has reportedly defaulted on a manufacturing agreement.
Local milk powder business Golden Koala, in which China-focused Jatenergy acquired a 51% stake last year, had entered into a production deal with Nutritional Choice Australia early in 2018 for infant milk formula, and in so doing paid a security deposit of AUD2m (US$1.4m).
Golden Koala also made an up-front payment of AUD500,000 for Nutritional Choice Australia to apply for a licence from Beijing to import infant formula known as the Certification and Accreditation Administration of the People’s Republic of China (CNCA).
However, New South Wales-based Jatenergy said in a filing with the Australian Securities Exchange today (12 June) Nutritional Choice Australia (NCA) had failed to honour the agreement. Golden Koala has therefore engaged the services of BDO Australia as receiver.
“NCA defaulted under the manufacturing agreement and has never produced any milk formula for Golden Koala,” Jatenergy said in the statement. “As a result, Golden Koala terminated the manufacturing agreement and demanded the repayment of AUD2.5m by 7 June.
“As no repayment has been received by Golden Koala despite the demand, Golden Koala has appointed a receiver in order to recover the amount outstanding.”
It also appears Golden Koala has a claim on assets held by Nutritional Choice Australia after its subsidiary was granted a “security interest over all its personal property to secure its obligations under the manufacturing agreement”, according to the filing.
Meanwhile, Golden Koala is seeking other options for the manufacture of its infant formula products for the Chinese market.