Australian Paper’s exposure, which is covered by creditor insurance, was just one of nine accounts totalling over $100,000 when the envelope supplier fell over.
The minutes from the first creditors meeting on 11 July show a total debt to unsecured creditors of $10.3m, with substrate suppliers Visy and Multapex second and third on the list, each owed $416,000.
According to PPB Advisory, which was appointed as administrator on 30 June, Australian Envelopes’ share of the domestic envelope market was over 40% and it serviced 3,200 customers each year.
Other unsecured creditors on the top 10 list published by PPB include Spicers Papers ($109,000), KW Doggett ($108,000) and Focus Paper ($80,379).
None of the unsecured liabilities were greater than 90 days, according to PPB, which said the $10.3m does not include debts owed to secured creditors, the ATO and employees.
Australian Paper general manager Wayne Stanistreet called the Australian Envelopes demise a “disappointing” end to a long relationship.
“Australian Envelopes were trading within terms right up until the last minute,” he said.
“The manner in which things came to a head was disappointing, not only for our own business but also for the employees of Australian Envelopes.”
Stanistreet said Australian Envelopes had been a “key” customer, but that Australian Paper has strong relationships across the entire envelope supply chain.
“In relation to the debt itself, this is still in the hands of the administrators, though of course it is quite standard nowadays for suppliers to take out credit insurance.”
Paperlinx group strategic sourcing manager Rohan Dean offered words of warning for the printing industry. “The Australian Envelopes situation is of major concern to Spicers and Dalton and it is certainly not making our industry flavour of the month in terms of financing and credit insurance.
“From a complete supply-chain point-of-view, a significant squeeze is coming and my advice to everyone is that they need to continuously improve their cash collections,” he added.
According to PPB, the administrator is working through a number of expressions of interests from potential buyers and the fate of Australian Envelopes could be revealed at the next creditors meeting on 26 July.
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