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Before the company’s annual meeting in Christchurch last week, share ownership had been restricted to growers and employees.
At that meeting, shareholders adopted a new constitution removing those restrictions.
In an update to the USX, merino company chief financial officer Peter Floris said the company remained focused on preparing for a capital-raising, including share buy-back. No offer documents had been lodged so no money was being sought just yet.
The company expected to distribute offer documents to all shareholders and eligible investors early next month and the offer would open in mid-November.
In 1996, merino growers took their future into their own hands by establishing a brand and markets for their fibre as Merino New Zealand.
In 2001, it became a fully commercial company as The New Zealand Merino Company, owned 65% by growers and 35% by Wrightson.
In 2011, growers bought the PGG Wrightson shares and, from that, four of the management team became shareholders in the business.
Before the constitution change, the company was 11% management owned and 89% grower owned.
In her annual report before the meeting, outgoing chairwoman Ruth Richardson said the company’s business model was constrained, its constitution was not fit for purpose and it had no real liquidity in its shares. Challenges loomed.
"We are determined to sustain our appetite for innovation, our reputation for ethical production and supply, and the commercial attraction of our contract regime. Those ambitions rely on the company moving to a new level," she said.
Being fit for the future would require the company shaping up to set its performance against three measures: people, profit and the planet.
There was an equal challenge for shareholders — to reshape the constitution so that its business purpose, its shareholding base and governance regime all combined to ensure the company could sustain its promise into the future better capitalised with a wider shareholding base and proper liquidity and therefore pricing of the shares, she said.
The company achieved a record pretax profit of $4.01million for the year ended June 30 and the midpoint valuation of the company was $33million, she said.
Disruption from Covid-19 meant that, for the first time in seven years, the board had determined the company needed to preserve the maximum amount of capital so no dividend would be paid this year.
The priority to ensure the company was well capitalised to weather the storm also meant it had resolved to embark on a capital-raising process, seeking about $10million of "extra buffer".
As she handed over to new chairwoman Kate Morrison, Ms Richardson said she did so "with great confidence that the company has the DNA to continue to transform the sector and be a leading light for how agribusiness in New Zealand should plan and prosper".
Ben Todhunter, who farms in the Rakaia Gorge, was re-elected as a director and was appointed to the newly created position of deputy chairman.
Synlait co-founder Dr John Penno has joined the board.