Wools of NZ reaches milestone
After several rounds of wool merger and capital raising collapses, Wools of New Zealand (WNZ) has achieved its minimum threshold of $5 million a week before its share offer's extended deadline of February 25.
The co-operative, until now run by a trust, can proceed from today with establishing a farmer-owned sales and marketing company for strong wool in the carpet and textiles markets. WNZ says it will put its brands and market connections to work and further develop its technical and marketing teams for the benefit of its farmer shareholders.
Chairman Mark Shadbolt said achieving the minimum investment represented an opportunity for strong wool growers who had invested and committed to own the WNZ brands and assets and be involved in a commercial strategy aimed at long term profitability.
"While we are anticipating a late rush of applications from farmers, the good news is that we have met the minimum threshold required. There's still time for growers to get on board and I urge all undecided strong wool growers to consider this opportunity seriously and get their applications in this week, to ensure receipt by the February 25 deadline."
He said the milestone had been reached through the continued support of farmers recognising the need to invest beyond the farm gate.
Among the investors are farmers who converted some of their loans in the Wools of New Zealand Trust into shares in WNZ.
Shadbolt said this act demonstrated their commitment and confidence in the capital raising and their desire to see the company thrive under farmer ownership.
The WNZ capital raising aimed to raise $10m with a minimum target of $5m.
The successful WNZ bid follows several attempts, including by the larger Wool Partners International proposal, to form farmer-owned groups to increase the profitability of strong wool by controlling the supply of wool from the farm to the market and investing in brands, marketing and sales. They were previously sunk by farmer apathy and lack of funding from low returns.
Which way are farmers likely to vote in the 2014 General Election?Related story: Farmers weigh voting choices