5 Mar 2015

Wool Equities' future under discussion

7:30 am on 5 March 2015

Directors of the farmer-owned investment company Wool Equities Limited and its biggest shareholder, the Primary Wool Co-operative, are trying to set up a meeting to discuss the future of WEL, as it continues to lose money.

Wool Equities, set up with farmer funds left over from the former Wool Board, has a majority interest in the Bruce Woollen Mill at Milton in South Otago, which produces specialist knitting and weaving yarns.

It also owns the small Palmerston North wool processor, Town and Country Textiles.

The Bruce Mill has run at a loss since Wool Equities and other investors bought it and reopened it in 2012.

This has been the biggest contributor to WEL's stated loss of $39,000 last year and bigger group loss of $890,000.

The Primary Wool Co-operative, which took a five percent stake in WEL last year, and some of its directors have been putting money into the company to keep the Bruce Mill going.

Primary Wool proposed a series of resolutions at Wool Equities' annual meeting last month to sell off some shares and assets and restructure the business.

But only one of those was declared to have got the votes needed to be adopted, and two Primary Wool directors withdrew their nominations to join the WEL Board.

This has left Wool Equities one director short of the number it legally requires: it is now trying to find another director and get its accounts audited, as well as to set up a meeting with Primary Wool representatives.

Primary Wool said it was disappointed with the response to its restructuring proposals, but that it was also prepared to attend a meeting to discuss where they go from here.