Carbon-credit company loses growth, falls flat

A COMPANY specialising in forestry carbon-credit projects in Asia, the Pacific Islands and Australia has collapsed. First Growth Funds, which describes itself as an investment company and has been listed on the stock exchange since December 1986, was last night placed in administration by its secured lender, Noble Investments Superannuation Fund.

By InvestSMART · 19 Jul 2011

By InvestSMART ·
19 Jul 2011

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It announced last week it was negotiating with its lender to restructure a $1.2 million debt. It made a $1.35 million loss after tax last year after generating $240,207 in revenue.

Company secretary Mourice Garbutt said in last week's announcement to the ASX that FGF was seeking to defer principal repayments to "better align operational receipts and to issue further equity to support increased investment in its carbon business portfolio". He said the board was confident that with further investment it could establish "valuable" carbon credits aimed at voluntary buyers.

The company's board includes Peter Mullins, a former chief executive of Greenpeace Australia Pacific. First Growth Funds' website also says that Mr Mullins is a former Australian diplomat, with a "strong personal commitment to saving the tropical forests of Asia and the Pacific while . . . securing effective development opportunities for local communities living in these forests".

According to First Growth Funds' website, it focuses on "emerging technologies in high-growth companies and markets".

The company had "active investments" in forestry carbon-credit projects in Asia and the region as well as an investment in a Digital Video group.

Through its wholly owned subsidiary, First Growth Ventures, it had a deal to provide project financing and development help to project developers operating in Indonesia, Asia and the South Pacific region.

The immediate focus of the project was to develop forestry carbon credits from preserving rainforests in south-east Asia, creating credits each year of the project's life. The company believed that typical project lives were greater than 20 years, representing a sound annuity income stream.

The shares had been trading flat at 0.1?.

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Frequently Asked Questions about this Article…

What happened to First Growth Funds, the forestry carbon-credit company?

According to the article, First Growth Funds (FGF) was placed in administration last night by its secured lender, Noble Investments Superannuation Fund, after earlier negotiating to restructure a $1.2 million debt.

Why did the carbon credit company collapse and enter administration?

The article cites deteriorating finances as the context: FGF made a $1.35 million loss after tax last year on only $240,207 in revenue, and it was seeking debt restructuring before its secured lender moved to place it in administration.

Who placed First Growth Funds into administration?

The article states that the company’s secured lender, Noble Investments Superannuation Fund, placed First Growth Funds into administration.

What business activities and assets did First Growth Funds hold?

FGF specialised in forestry carbon-credit projects across Asia, the Pacific Islands and Australia, had active investments in those forestry projects, an investment in a Digital Video group, and through its subsidiary First Growth Ventures provided project financing and development support to project developers in Indonesia, Asia and the South Pacific.

What were First Growth Funds’ recent financial figures and debt level?

The article reports FGF generated $240,207 in revenue last year, recorded a $1.35 million loss after tax, and had been negotiating to restructure a $1.2 million debt.

What plans did the company say it was pursuing before administration?

In an ASX announcement quoted in the article, company secretary Mourice Garbutt said FGF was seeking to defer principal repayments to better align operational receipts and to issue further equity to support increased investment in its carbon business portfolio, aiming to establish carbon credits for voluntary buyers.

Who is on First Growth Funds’ board and what is their background?

The article notes the board includes Peter Mullins, a former chief executive of Greenpeace Australia Pacific and a former Australian diplomat; the company’s website describes his commitment to saving tropical forests and supporting local communities in Asia and the Pacific.

What does the administration mean for shareholders and what happened to the shares?

The article does not spell out the immediate consequences for shareholders, but it does note that the company had been listed on the stock exchange since December 1986 and that its shares had been trading flat at 0.1.