Billionaire Gerry Harvey’s investment, through his retail chain Harvey Norman, in a Victorian dairy business just blew up.
Coomboona Holdings, for which Harvey Norman paid $34 million in 2015 for a 49.9% stake, has gone into administration.
The directors of Coomboona Holdings appointed Ryan Eagle and Stewart McCallum of Ferrier Hodgson as administrators.
The NAB then appointed Peter McKenzie Anderson, William James Harris and Matthew Wayne as receivers and managers. Gerry Harvey, the chair of Harvey Norman, is also a director of Coomboona.
Last month Harvey Norman announced a $20.67 million impairment loss for Coomboona Holdings which operated a dairy business in northern Victoria.
The Coomboona joint venture reported trading losses of $4.57 million for the half-year to December compared to a $3.26 million loss for the same six months the year before.
Harvey Norman has since demanded Coomboona repay an outstanding debt of $18.51 million.
Last month, Harvey Norman posted an after tax profit of $207.69 million, down 19%, for the six months to December.
However, underlying profit before tax, excluding property value adjustments and trading losses and impairments from the Coomboona dairy joint venture, was a record $296.08 million, up just 0.8% on the same period last year.
Harvey Norman shares fell 12.4% to $4.01 on the news, the biggest one day fall in two decades.
Today the shares are trading at $3.575, down 1.7%.