Wool Equities has announced it has secured funding to enable a bid for Wool Services International (WSI) on behalf of wool growers.
Wool Equities chairman Cliff Heath said the company was close to announcing details of how growers could take an ownership stake in the business.
On Friday, the High Court temporarily
delayed the sale of WSI to Cavalier Wool Holdings until there was an outcome to a challenge transtasman carpet-maker Godfrey Hirst had made to a Commerce Commission approval of the deal.
Godfrey Hirst general manager Tania Pauling said her company was relieved that WSI's business could not, ahead of an appeal, be dismantled by Cavalier as it sought to extract monopolistic benefits.
Godfrey Hirst, which bought the assets of Feltex New Zealand out of receivership in 2007, mounted its appeal against an approval given one month ago for the creation of a monopoly in the nation's wool scouring.
Cavalier applied for clearance from the commission after it was announced a combined two-thirds stake in WSI was on the market after the receivership of two Allan Hubbard-related companies - Plum Duff and Woolpak.
The commission had cited the threat of the Chinese wool scour industry as a reason for approving Cavalier's purchase of WSI.
Cavalier wants to re-locate WSI's scouring plants from Kaputone (near Belfast, north of Christchurch) to Timaru and from Whakatu to Cavalier's nearby plant at Awatoto.
Cavalier would also mothball scour lines at its own Clive and Timaru plants, and take over WSI's 50 per cent stake in the Lanolin Trading Company.
Cavalier had offered jobs to WSI's Whakatu workers and planned to expand its Awatoto operation.
The purchase and rationalisation would leave Cavalier Wool as the nation's only remaining wool scourer.
In yesterday's statement, Mr Heath said farmers should own critical wool assets, such as WSI, and Wool Equities, which said it has 7800 farmer shareholders, and it was doing all it could to help that happen.
"If Cavalier is allowed to purchase WSI we would be left with a monopoly. With wool prices stronger than they have been in over 20 years, enabling one entity to dictate terms would be foolhardy and detrimental to the New Zealand economy."
