Cottonsoft makes loss in 2011, receives capital injections
BUSINESSDESK: Cottonsoft, the maker of Tuffy paper towels and Kiwisoft toilet tissue, has received capital injections from its foreign owner after breaching its bank covenants in 2011.
The company did not pay a dividend to Asia Pulp and Paper in the 2011 calendar year, for which it reported an operating loss of $2.63 million.
That was wider than the loss of $1.51 million the previous year, mostly because of an increase in operating and distribution costs.
Revenue rose to $80.57 million from $72.83 million the previous year, accounts filed to the Companies Office show.
The bottom-line loss of $2.4 million was wider than that of $2.04 million the previous year.
Cottonsoft makes toilet tissue, paper towels and serviettes from imported paper.
Its accounts show that it breached its bank covenants in 2011 and that an $800,000 term loan was due to mature on July 1, 2012.
A company spokesman says the loan has been paid up and the company has received capital injections from its parent. It received $US1.6 million on July 25, $US500,000 on August 27 and $US900,000 on September 18.
The company has been the target of a campaign by Greenpeace over the environmental sustainability of its paper and by competitor Carter Holt Harvey for claiming its products were New Zealand-made when the raw materials were imported.
The company has $3.35 million of tax losses available to offset against future income tax.
Cottonsoft makes Tuffy Paper Towel and Paseo, CottonSofts and KiwiSoft Toilet Tissue.