Duckworth Turner solution

Press, 11 April 1979, Page 28

Duckworth Turner solution

Commercial

By

Alex. C. Fox

The patience of its major: creditors has enabled the! directors of Duckworth! Turner, Ltd, its shareholders,! and Morrow-Taylor, Ltd, to! find a way out of a financial) problem causedf by a rapid: increase in Duckworth ■ Turner’s output. Both companies are major footwear manufacturers; Duckworth Turner was established in Christchurch '

| in 1900, and Morrow-Taylor; I is based in Auckland. In the latest financial I year to January 31, 1979 (Duckworth Turner increased, (production 63.5 per cent to! ! 157.000 pairs of shoes. It had arranged a term (loan of $250,000 to help fin-: iance increased levels of production, but an interruption to its cash-flow delayed the uplifting of funds from this source. Last month Duckworth: Turner was faced with a

[major problem when the latei (delivery of a part of a line I of shoes delayed the deliv-j ery to customers of orders': (worth $105,000. Because of this Duckworth (Turner was unable to borrow the funds arranged im- : mediately, and the directors went with their problem to; the company’s creditors. { To their credit, the major; creditors of Duckworth' Turner agreed to allow the, (company time to meet its; commitments, and it appears; that everyone involved will benefit-from this. Duckworth Turner has now, it is believed, arranged for an injection of funds totalling $350,000 out of which the creditors will be paid, and increased production financed. About $250,000 is available from a major lending institution, and about $lOO,OOO will be deposited ' with Duckworth Turner by the present shareholders after Morrow-Taylor pays its (deposit for 60 per cent of

:!the shares in the Christ-! :■ church company. The payments to creditors! >)of Duckworth Turner will begin soon and it is thought: i that most of the debts will) • be paid in the near future 1 • and all of them within 18 i ; months. • Periodic liquidity problems) {are not unusual in business,] •{and quite common amongst) ’(manufacturers, who have to: ,tion run of goods for sale.) before beginning a produc-(tion-run of goods for sale. Of course if a company does no-t have access to sufficient , funds its problems may be- ' come insurmountable, and , liquidation inevitable. But in the case of Duckworth Turner, and its creditors, it appears that a plan ■ has been workecj out that 1 will benefit everyone in- : volved; the creditors will be paid in full,' Duckworth Turner has a good alliance 1 with Morrow-Taylor, and the ; staff at Roydvale Ave have 1 been promised further 1 growth in their company. 1