Growers back wool merger
Woolgrowers have almost unanimously voted in favour of the proposed merger of Wools of NZ (WNZ) and Primary Wool Co-operative- owned CP Wool (CPW).
Growers have contributed $10.9 million to WMDC over four years; 70% has been spent on marketing and innovations, the balance on operations, Wools of NZ says in its annual report.
During meetings in August and September 2017, shareholders were asked for their views on how best to recognise grower support through share options, says Wools of NZ chairman Mark Shadbolt.
Many growers supported recognising grower-shareholders who had remained committed since capitalisation in 2013, by offering them a larger stake in the company.
The board intends to register a product disclosure statement (PDS) by March 31, 2018 to allow for the issue of extra shares to all shareholders who have committed to paying the WMDC from capitalisation in 2013 through to June 2018. This will be on the basis of one share for every dollar contributed. Any shareholders in arrears on June 30, 2018 will not be eligible for extra shares.
Shadbolt says the PDS will show flexibility: the board may at its discretion issue shares beyond June 2018 in recognition of shareholders’ commitment. Wool growers who are not shareholders are also being offered the opportunity to supply into the company’s forward contracts though shareholders will have preferential access.
“The outlook is positive and as our performance to date indicates, with vision and determination we can change the face of the strong-wool industry. That can only be to the ultimate benefit of our grower shareholders and the broader industry,” says Shadbolt.
The annual report says Wools of NZ is still a young company.
“Very real challenges face our sector and it is critical to continue to invest in new ways of doing things if the industry is to survive,” the report says.
WMDC has enabled the company to invest in R&D, open markets and create innovative opportunities, the report says. It emphasises building an understanding of the unique value of strong wool and then working with partners to create true points of difference that will deliver robust commercial outcomes.
“Strong partnerships have been forged and we are seeing the benefits of these in breaking new ground and opening up exciting commercial opportunities for our shareholders that will underpin the future success of the company.”
Shabolt says about 70% of the WMDC has gone into Wools of New Zealand’s marketing or innovation strategies. The balance has paid for the work vital to day-to-day running of the company as it gets established and as returns on investment grow.
