Despite their best attempts to save a sinking ship, organic foods company Murray River Organics (ASX: MRG) has been forced to call in administrators as piling debts were unable to be offset by rising demand for organic foods, of which the Company was unable to capitalise on. 

MRG shares were first suspended from trading on the ASX at the request of Murray River Organics on 1 October 2021, a month after the Company released their FY21 results which included a $21.6 million net loss after tax. 

This came despite the organic food company generating $42.6m in revenue from its Muesli, Confectionery and Dried Fruit and Nut categories which were, and continue to be, stocked across all major Australian supermarkets. 

The decision to enter receivership had been one the Company had been hoping to avoid but having failed to attract a buyer for the business, as recommended from an external review conducted in December 2021, there was no alternative option for CEO Birol Akdogan and CFO Graeme Fallet. 

As of 9 February 2022, KPMG were appointed as Receivers and Managers of Murray River Organics and its associated companies with the intention of liquidating all assets. 

As per their FY21 Annual Report, Murray River Organics reported to have $43.7m in assets which included their farms, and $50.2m in liabilities for a net equity position of -$2.8m. 

The timing of receivership is an awkward one for the Company with many farmers having benefited substantially over the past four months from increased Summer rainfall courtesy of the La Nina weather pattern. This has reduced operating costs without the need for large amounts of seasonal irrigation while crops flourished. 

Although he was at the helm at the time of Murray River Organics’ collapse, not all blame can be assigned to Akdogan who was tasked with a difficult turnaround task when taking over from long-time CEO Valentina Tripp who led the Company since 2018 before resigning in January 2021. 

Fallet similarly was only appointed as CFO in March 2021. 

When presenting at the Company’s AGM just last month, Akdogan had been hopeful that sales would recover from the disappointing FY21 result where revenue fell 12% when margins got squeezed as Murray River Organics was struggling to compete against price competition. 

Akdogan declared his intention to sell the Company farms to re-capitalise the business while seeking international customers via the expansion of their global supply chain with a focus on their ‘good for you’ foods. 

These plans had aimed to capitalise on the growing international organic market which they valued to be worth more than USD $200 billion and expected to reach $1.1 trillion by 2027. 

Despite this, things just didn’t flow for Murray River Organics whose shareholders will be hopelessly paddling upstream if they’re looking for a return on their investment.