The idea had been raised at roadshow presentations and WoolsNZ had written to WSI shareholders suggesting they make the switch, chairman Mark Shadbolt said.
WoolsNZ’s capital raising closes on December 14, while the WSI takeover offer by Australian group Lempriere is not due to close until late February. “We know the time frame is not the same, but we have said to them they could accept the offer and reinvest into WoolsNZ.’’
The capital raising is open to all producers of strong wool, but the 3400 or so farmer shareholders in WSI are among a number of groups being targeted by the group. Others are ram breeders, who are influential and deal with dual-purpose animals, and the others are the 4000 or so farmers who have already been levy-payers for WoolsNZ.
The group is seeking a minimum of $5 million for the business model to proceed, but hoping for at least $10m in the capital raising.
No figures on early subscriptions have been released. “We’ve had a steady flow, but it is too early to call,’’ Shadbolt said.
He urged farmers thinking of subscribing for shares to do so before the December 14 cut-off, to avoid getting caught up in the Christmas mail rush.
Most farmers who have subscribed so far have been levy-payers already (and they qualify for a bonus share issue), but there has been new money as well.
WoolsNZ directors completed the last of their 46 roadshow meetings last Tuesday. Farmer apathy had been evident because of frustration about poor lamb and wool returns, but Shadbolt said some previously sceptical farmers appeared to have been brought round by the directors’ emphasis on the group’s sales and marketing focus and on better returns to growers.
“We’ve been saying to them that to get wool prices up from the historic $3/kg to a sustainable $6/kg and make it a viable business, then growers need some skin in the game outside the farm gate. We need growers to commit and invest.’’
The minimum subscription for shares is $5000, and shareholders will be required to pay an annual commitment based on their wool production.
High Court Claim
A high Court claim against Wools of NZ has no solid foundation, chairman Mark Shadbolt says.
“Our lawyer’s advice is that it is vexatious, and that it is a waste of the court’s time,’’ he said.
Wellington- based design company The Formary filed the claim in Wellington, with UK-based manufacturer Camira as first respondent and WoolsNZ second respondent. The claim relates to the WoJo upholstery product – a mix of wool and recycled coffee bags – which was to be used to furnish chairs in Starbucks cafes round the world.
The Formary managing director Bernadette Casey confirmed the claim had been filed on November 23, but said she could not discuss it or anything about progress with WoJo, because it was before the court. “I would love to but that would be in breach of the court.’’
Shadbolt questioned the timing of the claim coinciding with WoolsNZ’s capital raising programme.
WoolsNZ was to have supplied Laneve branded wool for the WoJo project and Camira was to be the manufacturer. Wool would have made up 70% of the upholstery mix.
WoolsNZ and Camira have a long standing working relationship, including the Blazer fabric range over the last three years made by Camira using lambs’ wool supplied by WoolsNZ.
Government agency Trade & Enterprise brought The Formary and WoolsNZ together and Casey’s WoJo product was taken to Starbucks in 2008.