Key Highlights
• Under the proposed Joint Venture, Namoi Cotton will hold a 51% controlling interest and Louis Dreyfus Commodities will hold a 49% minority interest. The Joint Venture will hold Namoi Cotton’s cotton marketing and commodities packing assets, for which Namoi Cotton will receive $30.38 million;
• Namoi Cotton will also raise approximately $3.65 million from the issue of 14,327,384 Namoi Capital Listed Stock to Louis Dreyfus Commodities;
• Namoi Cotton will continue to own and operate 100% of its ginning and cotton seed businesses, securing these critical supply chain activities for Growers;
• Namoi Cotton will continue to procure cotton from its Grower Members and the iconic Namoi Cotton brand will be retained in domestic and international markets;
• Namoi Cotton will achieve a reduction in its level of term debt providing greater financial strength, capacity and flexibility to capitalise on future business development opportunities;
• Namoi Cotton Alliance will enable Namoi Cotton to establish a strong platform for future growth and aims to enhance cotton marketing services to Namoi Cotton's Grower Members;
• Louis Dreyfus Commodities will enter into an off take sales agreement with the Joint Venture to buy a quantity of cotton each season from the Joint Venture;
• Louis Dreyfus Commodities will continue to operate its existing cotton origination, warehousing and logistics business - known as Louis Dreyfus Commodities Australia - as before, completely separate to and in competition with Namoi Cotton Alliance Joint Venture; and
• Implementation of the Joint Venture is subject to a number of conditions precedents, which are set out in the schedule to this announcement.
Namoi Cotton Co-operative Limited