Court clears $22.6M funding lifeline for Pro-Pac administrators

The Federal Court has granted wide-ranging relief to administrators Keith Crawford and Robert Smith of McGrathNicol to facilitate the ongoing operation and sale of the Pro-Pac Packaging group, approving new funding arrangements with Scottish Pacific and Kin Group and extending the convening period for the second creditors’ meeting to 20 May 2026.

Pro-Pac Packaging Limited, an ASX-listed manufacturer and distributor employing about 545 people across Australia and New Zealand, entered voluntary administration on 23 October 2025 after years of debt-funded expansion and deteriorating cash flow. Now, the administrators have authority under s 443A and s 447A of the Corporations Act to enter into amended facility deeds with Scottish Pacific providing up to $22.6 million in working-capital funding on a limited-recourse basis, ensuring continuity of trade and wages while pursuing recapitalisation or sale options. They were also authorised to execute a separate Kin Group administration-support deed and were relieved from personal liability for obligations arising under both facilities.

Justice Beach accepted that the funding arrangements were in creditors’ best interests, prevented immediate liquidation, and preserved enterprise value by allowing the businesses to continue as going concerns. He further ordered that funds could be handled through a single Pro-Pac Group administration account and that administrators may provide creditor information through an online portal, extending response times from five to ten business days.

Finding that a six-month extension was justified under the well-established Riviera factors, the Court noted the group’s size, cross-border complexity, and the likelihood that additional time would maximise returns for both secured and unsecured creditors. Confidentiality orders were made over sensitive financing material, and creditors were directed to be notified within two business days.

Read the decision here.

The administrators were represented by counsel Leo Freckelton of List G Barristers, instructed by Norton Rose Fulbright Australia.