Of the real target group, those 4000 or so farmers who had supported WoolsNZ with a voluntary fee payment at some stage over the past three years, the response rate was only about one in seven, although not all applicants will have been fee-payers. About 15,000 copies of the prospectus were mailed.
At December 19, 552 farmers had applied for a total $4.1 million worth of shares. This is less than the $5m minimum for the issue to proceed, and the capital raising has been extended to February 25.
Some further applications had been received since mid-December, WoolsNZ acting general manager Tim Lonsdale said. The average subscription was about $7400 worth of shares, compared to the minimum $5000 required.
The company had wanted about $10m in issued shares, representing about 20 million kilograms of strong wool, whereas the applications so far represent about 12m/kg. The wool volumes are crucial because they are budgeted to bring in ongoing cash flow to the group through a fee payment (which WoolsNZ calls a commitment).
Chairman Mark Shadbolt was in Europe for the big Domotex trade fair in Germany and could not be contacted.
Lonsdale confirmed that the numbers meant some wool growers who were paying the voluntary fee had not applied for shares in the company.
“We don’t know why that is. It is one thing to have the fee taken out of their wool sale price and another for them to write out a cheque as a long-term commitment.’’
WoolsNZ plans to contact the voluntary fee payers and other farmers who have contracts with the company, notably for the Laneve brand, and also corporate sheep farmers, including Maori interests.
