7 Oct 2011

Wool Co lowers entry level for wool unity plan

2:01 pm on 7 October 2011

A bid to unite parts of the wool industry into a farmer-controlled operation will need to find double the number of farmers and other investors it had planned for as a result of its decision to lower the minimum stake for investors.

Wool Co, a joint venture between the farmer owned Wool Equities Ltd and Christchurch-based investment bank Ocean Partners, aims to raise $40 million to buy New Zealand's biggest wool exporter, Wool Services International (WSI), which also runs one of the country's two scouring operations.

Wool Co will initially seek to raise enough money to bid for the majority shareholding in WSI held by two companies that are in receivership.

The ultimate aim will be to merge Wool Equities and WSI into a single operation.

Wool Co chair Cliff Heath, who also heads Wool Equities, says farmers have been voicing huge support for the plan but feel the entry level of about $22,000 is too high.

Mr Heath says the initial minimum stake will be lowered to $9500 and a financial commitment from 2000 - 4000 farmers will be needed.

He says the support shown translates to investment he is confident of reaching the target.