New Zealand WSI awaits Court decision before raising fresh capital

19 Nov '11

2 min read

New Zealand Wool Services International (WSI) is awaiting the High Court's ruling as to whether Cavalier is authorized to bid for WSI or not, and based on this decision only the firm would carry forward its plans to raise fresh capital.

As stated by WSI Chairman Derek Kirke, it does not make sense in starting to raise capital till a certainty arises regarding several issues which presently are unanswered.

He, however, said that WSI stakeholders are puzzled over the WSI Board's silence, particularly when its opponent bidder Wool Equities Limited (WEL) has already started raising capital. The stakeholders have thus urged WSI to shed light on the situation.

When carpet producer Godfrey Hirst lodged a petition before the High Court challenging Commerce Commission's move of clearing Cavalier's US$ 40 million bid for WSI, WEL came into play and stated that its newly instituted firm New Zealand Wool Investment Company (Woolco) is interested in raising capital for acquiring WSI. WEL since announced a capital raising of US$ 77.4 million to fund the acquisition.

The WSI Board, Mr. Kirke said has remained most disinclined to publicly contest the merits of capital raising by WEL or Woolco, and has chosen to leave the wool growers and WSI shareholders to make their own cautious decisions.

If Cavalier is allowed to bid for and acquire WSI, the acquisition would earn it a monopoly over the wool scouring industry of the country.

According to the WSI Chairman, outcome of the High Court's ruling on the petition would play an important part in deciding WSI's future course of action and it would be imprudent of WSI to initiate raising of any capital till the outcome of the petition is known.

Fibre2fashion News Desk - India