The wool restructuring plans took another laborious step today, with the announcement that Wool Partner Co-Op had raised $35 million of capital, which is only just over half of its goal.
Wool Partners Chair Jeff Grant blames a concerted effort to discredit the bid by the Wool Exporters council, for the slow take up of capital.
However, this writer believes a past history of wasteful use of wool farmers money, a reluctance to bail out PGGW wool, and a lack of spare cash in the sheep sector are the reasons farmers are reluctant to invest.
Based on this story it appears the rules to start up seem to have changed, with Jeff Grant now stating that if the directors feel they can get the $65 million target by next year they will start the new Co-Op on 1st April 2011.
What happened to the strong assertion that cheques will not be cashed until the $65 million was reached??
Wool Partners Co-operative has raised $35 million - just more than half its $65 million target - despite efforts by the Wool Exporters Council to undermine the formation of the co-op, it says. It launched its capital raising in October last year with the aim of getting as many of the country's 12,500 wool farmers as possible to commit half the strong wool produced annually in the country - 65 million kilograms - to the co-op reports Stuff.
Chairman Jeff Grant said subscriptions for 35 million $1 shares had been received and he was confident the co-operative could be launched. Growers will be able to subscribe for shares with a payment of 20 cents a kilogram of greasy wool this year, followed by four annual payments of 20 cents a kilogram from 2012. There is also an option for this year's subscription instalment to be deducted from wool receipts in the period March 1 to May 31.
Wool Partners Co-operative is now set to start operating on April 1 and will complete the purchase of certain operating assets from Wool Partners International on that date, including Wools of New Zealand and its brands. The prospectus is based upon and will proceed when the commitment to purchase 65 million shares representing 65 million kilograms of greasy wool has been received. But the directors have retained the right to consider proceeding at a lesser figure.
Grant said if Wool Partners reached the $55 million mark and commitments by growers over the next 12 months indicated it would reach the $65 million mark then it would consider going ahead with the co-op.
3 Comments
Unfortunately its dead in the water. Anyone who is supportive will have signed up after two extensions already so to get another 30 million kg pledged on top of is just wishful thinking. Why oh why did they set the bar so high in the first place? They have just painted themselves into a corner.
Interestingly WPI now goes back into the ownership of PGW who would have been banking on getting their 17mil and in the interim they have been taken over by the chinese who just happen to be our biggest wool customer....? Luckily those that hold the supply still call the shots.
“Cleaning up after Norgate may be expensive”
CHALKIE
“3. Fixing up the half-cocked exit from the wool business and associated creative accounting – work in progress.”
http://www.stuff.co.nz/business/opinion/4353702/Cleaning-up-after-Norgate-may-be-expensive
Most of the farmers that have to tick this box to make this wooly pig fly can’t. The banks aren’t lending to the cockies to help PGGW out! Are they? I hope Wrightson finance isn’t taking on more cockies fairy equity, as security, in exchange for shares that have a fairly large fairy content?
“Charlie Graham speaks softly but carries a big stick. The man in charge of New Zealand's biggest agriculture investment pool, the $19 billion lent to pastoral farmers and fruit and vegetable growers by the ANZ-National banking group, is convinced something is "seriously wrong" with the meat industry.”
I don’t think NATANZ like sheep farmers much anymore……
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