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High Court stays WSI sale to Cavalier
11
Jul '11
In response to an appeal filed by Godfrey Hirst, New Zealand's largest carpet producer, the High Court at Wellington has granted stay on the sale of Wool Services International (WSI) to Cavalier Wool Holdings until a decision is arrived at on the appeal.

Godfrey Hirst had appealed against the June 9 decision of the Commerce Commission permitting Cavalier Wool Holdings to acquire the wool scouring assets of WSI, a processor and exporter of wool.

The appeal was filed by Godfrey Hirst as the Commission's decision amounted to creating a monopoly. Cavalier Wool Holdings is already the country's largest wool scourer, and the acquisition of WSI by it would have created its monopoly in the New Zealand's wool scouring industry.

After the Commission's decision, Cavalier had announced that the wool scouring units of WSI would be shifted to its Awatoto and Timaru sites from the present Belfast in Canterbury and Whakatu in Hawke's Bay.

Cavalier had also announced that it would sell the trading arm of WSI as a running concern.
Woolpak Holdings and Plum Duff together hold 63.8 percent stake in Wool Services and they are also under administration. Hence, a controlling stake in the company is on sale.

Tania Pauling, General Manager at Godfrey Hirst, welcomed the High Court's decision saying “there are severe issues in the Commerce Commission's decision and we are pleased that the WSI's business cannot be acquired by Cavalier, ahead of the appeal.”

The High Court's ruling will come as a welcome relief for WSI staff, the country's wool industry, as well as Plum Duff shareholders in WSI. All of them have been strongly opposing the WSI sale to Cavalier, Pauling added.

The next hearing of the appeal by the High Court is scheduled for August 22.

Fibre2fashion News Desk - India

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