Shareholder takes stand

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The Silver Fern Farms’ shareholder roadshow rolls into Cheviot on Monday evening to outline why shareholders in SFF should vote against the proposed investment by Shanghai Maling in New Zealand’s largest meat processor.
Leading the shareholder charge is Canterbury farmer John Shrimpton the largest farmer SFF shareholder.
He says a group of shareholders were so concerned by SFF’s proposed sale of ‘‘our company’’ that it required SFF to hold a special meeting.
‘‘In short, the only opportunity we have to prevent the sale of our co-operative is by voting against the Special Resolution that will soon be put to us,’’ he says.
The Special Resolution was requisitioned by shareholders holding some seven percent of total shares because of concerns about the proposed transaction and how it was pursued by the company and its advisers.
‘‘Numerous aspects of this do not sit well with our traditional co-operative values.
‘‘An attempt to raise these concerns before was unsuccessful,’’ says Mr Shrimpton.
He says many of the requisitionists actually voted in favour of the ordinary resolution put to shareholders about the proposed transaction in October 2015, but developments and analysis since had convinced the group of shareholders that the proposal was ‘‘not properly approved, is not in our best interests as shareholders and should not be approved now’’.
‘‘The alternative to the proposed sale is to retain ownership of our co-operative for those who will be following in our footsteps. Preserving 100% ownership will enable us to control our destiny by retaining flexibility on raising capital, if any is needed, without the pressure of receivership, likely pay greater dividends later, and participate fully in the future upside of our Plate to Pasture strategy.’’
The shareholders believe the proposal is a major transaction and should have been approved by a Special Resolution of shareholders and that financial forecasts given at the time of the vote in October were ‘‘materially different from the Company’s actual, positive results released three weeks after that vote’’ and were told the company faced an effective threat of receivership if the October vote wasn’t passed.
‘‘Approving the Special Resolution will see the effective end of our co-operative as we know it. But debt had actually been reduced sufficiently for SFF to continueas a farmer-owned co-operative. SFF then, and likely now, appears to be relatively healthy, bankable and, if required, able to refinance without the need to sell a controlling interest.
‘‘The document we received didn’t include forecasts of what would appear to be record earnings in 2017 and 2018, or of how plant closures would boost profits,’’ says mr Shrimpton.
‘‘We believe that it is extremely difficult to see how the Proposed Transaction has been pursued either in our best interests as shareholders, or in accord with our traditional co-operative values.
‘‘Given these strong concerns surrounding the Proposed Transaction, the special meeting has been requisitioned to vote on the Special Resolution so that the Proposed Transaction might be properly approved, or not, if we see fit to reject it.’
Mr Shrimpton says if the Special Resolution isn’t passed then it would be difficult from legal and other perspectives for the SFF board to claim proper authority to continue to pursue the proposed transaction and ‘‘it should not proceed.’’
The co-operative has set down the special meeting for July 11 in Dunedin where shareholders will vote on approving the proposed partnership and restructure, where the Chinese firm, Shanghai Maling, takes 50 percent ownership of the meat processor in return for $261 million of cash, a special dividend, and funds to bankroll the cooperative for seven years.
Í The North Canterbury shareholders meeting will be held in the Cheviot Trust Hotel on Monday, June 27, at 7pm.