Wool ind takes sigh of relief on Hirst's acquisition of Feltex

04 Oct '06

2 min read

Wool industry has received solace due to economically troubled carpet producer Feltex being sold to avoid its liquidation. Industry interests want to know what lasting plans will be made by the new owner for this company.

Feltex will be sold to its rival Godfrey Hirst at a price of $140 million, by receivers chosen by ANZ bank.

Hirst hopes this transaction will allow Feltex to reconstruct itself, as Hirst will arrange new deals with company suppliers and will explain its plans to consumers.

Feltex, wellknown in New Zealand's wool market, was improperly managed and it has constantly reduced its carpet costs to remain in competition.

85 percent of the 820 Feltex workers in New Zealand will retain their jobs, and its 500 Australian employees will remain in job. 120 workers at Kakariki wool will be dropped and Christchurch plant are facing risk of becoming jobless.

Selling of the company has crushed hopes of shareholders who wanted to recover cash wasted due to investment in it.

Feltex owes $NZ135 million to ANZ Bank, which put it into receivership on September 22, 2006.

Receivers have not revealed selling price, but they believe Hirst is making sufficient payment to cover Feltex's bank dues and it will take care of company workers' rights.

Tania Pauling, General Manager of Godfrey Hirst said she feels the company has a bright future.

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