Australian potato company Mondello Farms has been placed in receivership

Restructuring and corporate advisory firm McGrathNicol was yesterday appointed as receivers following Heard Phillips being appointed administrators of the company.

Mondello Farms is a large scale wholesaler of processed potatoes in the Australian potato industry and employs about 140 staff in its South Australian and Victorian operations.

"We will continue the company's operations as normal whilst an urgent assessment is undertaken of the requirements for the management and harvesting of existing crops and preparations were made for planting the winter crop,"McGrathNicol partner Sam Davies said.

"We will be working closely with contract growers, employees, customers, critical suppliers and the Mondello Farms management team over the next two weeks to stabilise the business operations, including reviewing existing supply and distribution arrangements.

"It is too early to fully determine all the reasons for Mondello Farms failure, but it is noted that the company was under-capitalised and had incurred significant operating losses from which it was not able to recover when industry prices for potatoes fell in 2011/2012.

"The Mondello Farms business will soon be taken to market for a sale on a going-concern basis."

Mondello Farms' operations are comprised of potatoes grown on owned and leased land in South Australia and Victoria, potatoes sourced from third party growers, a substantial processing packaging facility.