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.
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