Wool Equities to de-list from NZAX, trading suspended
March 10 (BusinessDesk) - Wool Equities, which processes wool for its grower shareholders, will de-list from the small-cap New Zealand Alternative Market, and has suspended share trading.
The company has been negotiating a potential merger with Primary Wool Cooperative, a farmer-owned joint venture with wool broker Elders, and one of the pre-requisites of the talks is for Wool Equities to quit the stock exchange, chairman Clifford Heath said in a statement.
The company decided it would be better to spend listing fee funds on direct communications with its 9,500 shareholders, and with limited trading on the bourse, its value was questionable, he said.
Once it leaves the stock exchange the company will manage its share register internally and offer a platform to allow investors to sell their holdings.
The boards of Wool Equities and Primary Wool Cooperative met last month to discuss the merger, and decided there were enough opportunities to continue talking, Heath said.
Milton, Otago-based Wool Equities operates in the finer end of the wool market for garments, using merino, mid-micron and crossbred lamb’s wool and Palmerston North-based Primary Wool handles all types of wool.
Heath said Wool Equities’ manufacturing plants at Milton and Palmerston North have good forward orders, though cash flow is still tight.
The NXAX-listed shares trade infrequently, last changing hands on March 4 at 2.2 cents apiece. That values the company at $681,000.