Shares, cash handout last hoorah for Wool Board

Friday 24th June 2011

Wool Equities says it is set to pay out $6.27 million from the rump of the old Wool Board, the Wool Board Disestablishment Company (Disco).

DisCo is effectively a subsidiary of the farmer-owned Wool Equities and the assets of the former Wool Board it holds include $290 million in Wool Board tax credits, though those are only available to offset tax liabilities.

About $7 million money set aside for sorting out continuing legal issues after the producer board was axed was partly consumed in a series of court cases over an unsuccessful challenge by fine-wool farmers to allocations of Wool Board money.

Saxmere Co Ltd, Escorial Co Ltd, Richard King and Russel Stewart Emmerson and Forest Range Ltd failed in a marathon series of legal bids to extract cash from Disco, after alleging that the Wool Board refused to recognise "Saxon" as a separate merino wool type.

Disco said $3.4 million would be distributed to eligible non-merino growers who elected in 2003 spend the cash on additional Wool Equities shares: 18.9m new shares will be issued at a price of 18c a share.

But eligible growers would also be allowed to change their minds and take cash instead - the shares would still be issued to them but mmediately cancelled.

Growers will be sent a notice next week telling them how many shares they are entitled to, and will then have a three-week window in which to opt for cash instead.

NZPA

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