Australian Agricultural Co is the latest company to be entangled in the collapse of plantation group Great Southern, revealing it has an exposure because of its position as guarantor on subleases taken out by the now defunct company.
The Australian Financial Review reports that AAco said yesterday it could have a contingent liability of $1.7 million because it agreed to guarantee subleases taken out by a former subsidiary, Rural Management Partners.
The revelation came as AAco, the country's largest beef producer, downgraded its earnings guidance, warning that it did not expect a profit in the first half of the 2009 calendar year and might not turn a profit in the second half of the year either.
It said earnings had been hit by low cattle prices, flood-related damage and adverse movements in the Australian dollar.
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