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Exporters Say Don’t Take Your Anger Out On Us

Exporters Say ‘Don’t Take Your Anger Out On Us—Just Answer The Questions’

Wool Partners Co-operative is trying to muzzle the Wool Exporters Council from encouraging woolgrowers to ask a few hard questions, but the Exporters’ Council is unrepentant for pointing out the shortfalls in a prospectus to raise $65 million.

Wool Exporters Council executive manager Nick Nicholson said he would continue to encourage farmers to keep asking difficult questions, as woolgrowers were entitled to know the facts before they invested their hard earned cash.

“We’ve looked through the prospectus gloss and glitz and found a few fishhooks. We’ve told farmers what information should be available to them and framed up a few questions for them to ask.

“Clearly the answers from the co-operative’s promoters have not satisfied woolgrowers, as they are staying away in droves. Indeed, we have even had Wool Partners Co-operative chairman Mr Jeff Grant express anger at the exporters and say that if woolgrowers had been left to make their own decisions, the vast majority would support the co-operative.

Mr Nicholson said that that statement alone was total justification for exporters wanting to make sure growers were better informed.

“Further confirmation that the float will fail has come from independent Horizon Research, which indicates 70.5 percent of growers have not and will not invest in the float,” Mr Nicholson said.

Mr Grant assured growers in the original prospectus that they could apply “safe in the knowledge” that the Wool Partners Co-operative float would not proceed unless it gained support from 50 percent of all strong wool growers by volume, equating to a take-up of 65 million shares (at $1.00 per share).

But yesterday the company announced it had only received applications for 35 million shares (about 27 percent of strong wool by volume).

Initially Mr Grant was tight lipped about the level of subscription, except to say that WPC had “overwhelming support”. But when he was challenged by the Wool Exporters Council to come clean on the facts, he confessed to the true situation.

The co-operative is unlikely to ever reach even its now reduced target, with Horizon Research suggesting the promoters might squeeze another 2 or 3 percent if they are lucky, but a clear majority of woolgrowers are not interested.

“I can understand Mr Grant’s frustration. Just because we presented facts that he didn’t like, it’s no good taking his anger out on us,” Mr Nicholson said. “For example, you won’t find it stated in the prospectus that the businesses the co-op is buying have made losses totalling $5.8 million over the past two financial years. We drew that to growers’ attention, and we think we were right to do so.”

Mr Nicholson said he took umbrage at Mr Grant’s statement that woolgrowers were the only people whose livelihood was dependent on higher prices and this statement demonstrated an alarming naivety on how the export business worked.

Exporter council members buy wool using their own money, pay woolgrowers within eleven days, hedge and juggle currency fluctuations and market the wool globally.

“Exporters know better than anyone else that woolgrowers must make sustainable returns, or there would be no wool industry. When the market is down, it’s much harder for the exporters to make money than when prices are booming. Of course exporters want to see the price of wool at high levels.”

Mr Nicholson said every good farmer knew when to put a sick animal out of its misery and it was time Mr Grant did the decent thing with Wool Partners Co-operative float.
Ends

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