The company also disclosed it was being prosecuted by the Bay of Plenty Regional Council over untreated wastewater discharges, with a provision of $100,000 made for a possible fine.
The wastewater breaches have cost the company $3.5m over the past two years, with that sum covered by insurance.
In June the company again found itself in breach of its banking covenants with the BNZ, after having run into similar issues regularly since 2022.
The bank issued a non-waiver letter, noting that “no action would be taken at this time” but it reserved its right to do so in future.
In December – after the period covered by the financial report – management successfully negotiated a key $6m BNZ loan that will mature in 2030 and said the operation was were no longer in breach of covenants.
The $17.4m loss, burning of $7.5m in cash and a $17.1m negative working capital deficit led auditors to flag going concern issues: “Material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern,” KPMG said in its audit letter.
Notes to the company’s accounts indicate WMOL is seeking to mitigate these concerns by raising a further $15m in capital by March next year.
It suggested one of its shareholders – likely an iwi entity, given references to an aquaculture settlement needing to first be completed – had provisionally committed $8.5m towards this.
The Government, through the Provincial Growth Fund and advances to iwi groups, has advanced $52m in capital over the past seven years to the struggling venture – a mussel farming and processing business based in Ōpōtiki – with the most recent commitment being $16.5m approved by Cabinet in September 2024.
WMOL’s 2025 report said this recent government investment – tied to parallel contributions by private-sector partners – was now tapped out.
The September 2024 decision by the Government to invest a further $16.5m drew contrasting reactions from governing parties.
“We take an extremely sceptical view of this use of taxpayer money and have made our thoughts clear to the other parties,” an Act Party spokesperson told the Herald in November 2024.
The Whakatōhea Mussels factory in Ōpōtiki.
Defending the spending, Regional Development Minister Shane Jones, of New Zealand First, said at the time: “You can do one of two things: you can step aside and let the animal spirits of capitalism do their thing; or you can take a stand and say, ‘We really do want to see the mussel industry prosper and – more importantly – create employment opportunities in an area that’s suffered 40 years of blight’.”
Jones said the $16.5m investment would be the last public money channelled into WMOL.
“It’s not my expectation that there would be any more money flowing in from the Crown.”
Government investment into WMOL has resulted in Crown Regional Holdings becoming the largest shareholder in the venture, controlling 40% of shares.
Because of the accumulation of shares by the Crown and two iwi entities whose investments in WMOL have been underwritten by the Government, the Takeovers Panel declined to approve a debt-to-equity conversion in April this year, which left government-backed shareholders holding a combined majority stake (52.32%) in the company.
The panel agreed not to take enforcement action if other minority shareholders voted to approve the deal and restructured the deal as a share issue.
One of those iwi entities, Te Tāwharau o Te Whakatōhea, wrote down the value of its 7.4% stake in WMOL by two-thirds.
Its annual report to June this year books a $4m impairment charge to leave the shares now valued at just under $2m.
WMOL chairman Fred Cookson and chief executive Peter Vitasovich did not respond to Herald requests to discuss the financial results, but the pair provided an upbeat and joint foreword to the accounts.
“This journey has required difficult decisions around staffing, operational structure, product mix, and capital investment – all while contending with volatile market conditions and establishing our product supply pipeline. These efforts demanded considerable investment and time. We began to see the operational benefits of this work, reaching a vital turning point at the later part of FY25.”
The chairman and chief executive note this turning point was yet to be reflected in the accounts, with trading through the second half of this year yet to reach break-even.
“This progress has not yet translated into improved financial performance,” they said.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.
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