The overseas investment offer to rescue red-meat processor Alliance Group has been made sweeter.
Irish company Dawn Meats has increased its proposed investment from $250 million to $270m, after stronger-than-expected year-end results from Alliance.
Dawn Meats’ proposed 65% stake in Allianceremained unchanged despite the higher investment.
Alliance chairman Mark Wynne said that, as part of negotiations in July, the co-op had to commit to a year-end profit and net debt target.
The co-op’s unaudited profit projection of $18m to $24m was above target, prompting the increased offer, which would be distributed through a dividend.
“So we both agreed on $250m for 65%, but agreed [on] a mechanism that said, if there’s a variance in favour of Alliance, Dawn will top up.
“And if there’s a variance in favour of Dawn - in other words, we underperform on our target - then Alliance will top up Dawn.”
Over the past two weeks, Alliance representatives have travelled the country talking to shareholders about the proposal.
‘Please vote’
Alliance Group chairman Mark Wynne.
Wynne said there had been some honest and tough conversations.
“[I’m] still pretty nervous.
“We’ve got four and a bit days, so we have a special general meeting in Invercargill on Monday, on the 20th, and the meeting will open at 11am, voting will close 11.45.
“And then Elections NZ and KPMG will go away and count and verify, and announce the result the following day.
“So our key message to everyone is please consider the proposal and the alternative that you see fit, vote accordingly, but the main thing is please vote.”
He said the co-op had been upfront about Alliance’s finances, with $188m in debt due by December 19.
After exploring all options over the past two years, he believed only Dawn Meats met the scale and timing needed.
Shareholders were making a decision that he called a once-in-a-generation choice for farmers.
