Wool Partners Co-Op down but not out

Is this an opportunty lost or money saved? This will depend on your point of view on the Wool Partners Co-Op capital raising.

Achieving nearly $40 million in committed capital in todays economic climate is impressive, and shows many farmers are willing to invest in wool as a long term investment.

But to achieve the marketing goals the proposed Co-Op needed 50% of the clip, and farmers were not prepared to invest to that degree.

Some reluctance has been born out of the lack of success of previous ventures funded by wool growers, and many had given up on wool many years ago.The sudden upsurge in prices also possibly worked against this investment, and many farmers need all the cash they can put their hands on to reduce debt, and escape the pressures bankers are puting them under.

Wool Partners Co-operative has announced today that it has not succeeded in getting the level of grower support required to proceed.

• For those who subscribed to Wool Partners Co-operative, you application cheques will be destroyed for security reasons and shares will not be allotted. If you elected to pay for your shares via deduction from your wool proceeds, no such deduction will be made.
• Wool Partners International will continue to undertake its current business and work to develop options (such as the recently announced contracts) to improve wool returns.

“There is a clear groundswell of growers wanting to see change in the strong wool industry and willing to invest to make that happen,” says Wool Partners Co-operative Chairman Jeff Grant.The Wool Partners Co-operative capital raise closed on Wednesday 16 February, attracting nearly 40 million share subscriptions – or 30% of the strong wool clip. This is short of the required $55m support required for the co-operative to proceed.

“Those who have subscribed, and even a number of growers who haven’t, have encouraged us not to give up and, while we can’t do anything more under the current offer, the board of Wool Partners Co-operative are determined to work with like-minded growers to develop an alternative. We’re not sure how long that will take but we hope to be in contact with those that have shown their support for the co-operative over the next few weeks. As advised during the capital raise, cheques already received from growers will now be destroyed.