WoolCo has failed in its task of raising capital to buy Wool Services International (WSI), New Zealand's largest wool exporter.
WoolCo was formed as a joint venture between Christchurch-based investment bank Ocean Partners and farmer-owned Wool Equities. It was seeking to raise NZD 40 million from farmers and other investors to prevent WSI's sale to Cavalier Wool Holdings.
The joint venture company believed that the sale of WSI to Cavalier will result in creation of a wool scouring monopoly in New Zealand.
By raising enough capital, WoolCo planned to acquire WSI and use it as a farmer-controlled wool marketing venture.
WoolCo will now return the money raised by it back to investors and farmers.
The company said wool growers in the country expressed a lot of support for its initiative to acquire WSI as a farmer-owned entity, but it did not translate into enough financial contribution to allow the purchase of WSI.
Last month, the High Court validated the decision of the Commerce Commission to allow Cavalier Wool Holdings to purchase WSI. The deadline for appealing against the High Court decision expires this week.
Fibre2fashion News Desk - India