Alliance Group’s sale of a 65% stake to an Irish investor has brought relief to the chairperson and confidence to some shareholders.
After weeks of voting, 87% of votes were in favour of the $270 million sale to Dawn Meats, in a result announced today by New Zealand’s largest lamb processing company.
The money will help Alliance pay between $188-200 million in debt to six banks by a December deadline.
Today chair Mark Wynne said he was, “relieved and excited when I saw the results".
"Relieved that we got such a clear mandate from our shareholders. And excited about the future that is opening up to us in partnership with Dawn Meats.”
Otago farmer shareholder Jim Stevenson was one of those who voted yes to the deal. He said it would “give [his farm business] a lot of confidence going forward” and it was “big of Dawn Meats to take a bit of a jump into the New Zealand market” in difficult times.
“The poor returns have meant farmers have shifted away from sheep and beef... there has been a lot of pine trees of late and dairy conversions.”
He had been concerned that, without the Dawn Meats cash injection, “it would be a pretty quick demise of Alliance”.
The deal meant Dawn Meats would have year-round meat supply from the southern and northern hemispheres.
Visiting in Invercargill today, Dawn Meats chief executive Niall Browne told shareholders: “Your product, as you know, is excellent. We look forward to marketing that around the world.”
And Wynne said: “They're strong in beef. We're stronger in lamb. They're strong in the UK, Europe. We’re strong in the US and Asia, particularly China.”
Alliance had 4300 farmers shareholders and employed 4000 people at six plants – four in the South island and two in the North Island.
Just 13% of votes opposed the sale – including Gore farmer shareholder Andrew Morrison.
“I'm a firm believer in cooperatives,” he said.
“We think there's value in owning the supply chain but, as I say, the voters have voted and we support that.”
He also said: “It actually makes it easier when there's a clear mandate. So I'm actually really happy with that. There is nothing worse than being confused or a half message delivered. So the message has been delivered and let's shake hands with the new entity and crack on and be successful."
Alliance member’s shares will soon go on the unlisted stock exchange. Currently they are nominal shares worth one dollar.
“So, going forward, they change to ordinary shares and that means they'll go up and down with the market demand and up and down with the fortunes of the company,” Wynne said.
SHARE ME