Alliance Group is in the process of appointing an investment bank to further explore capital raise options.
In a chairman’s letter sent to shareholders this week, Mark Wynne said given that the co-op will not know the outcome of the farmer capital raise until next year, this was a prudent decision.
Shareholders options remained the same as earlier this year, Wynne said – remain a co-operative, adopt a hybrid model or sell the entire business.
In April Wynne said the future of the co-op depended on the farmer-shareholder response to new capital-raising initiatives.
That was after shareholding requirements to process stock were adjusted, also in April.
On Monday Wynne also announced a processing sheet deductions change.
The rate of share deductions was set to balance maintaining livestock flows, raising capital and meeting the expectations of banking partners, he said.
“While there were mixed views about the level of deductions, we have heard concerns that the level of deductions are too high for some farmers in the current economic climate and that you feel these deductions are unfair across species.”
The following changes apply:
• The deduction rate for lamb, mutton, beef and venison is reduced to $2 per stock unit, effective from September 2.
• A shareholding premium of $12 per head will be paid until mid-December for cow. This is to partially offset the $24 share deduction on the processing sheet. From mid-December, the share deduction will be reduced to $12, and the shareholder premium will no longer be applied.
• A change will be made to bobby calves ($1 per stock unit), effective before the next bobby calves season.
• The deduction for cow will change no later than mid-December once the co-op’s livestock mainframe migration Enterprise Resource Planning work has been completed.
“Alliance is undergoing significant transformation as we tackle various challenges. We acknowledge that we haven’t always been perfect, but we are committed to listening, learning, and adapting swiftly. Our global markets and your on-farm operations are facing considerable challenges,” Wynne said.
“Despite this, it is essential that we continue to push forward with the necessary changes to ensure that Alliance becomes a high-performing company and that livestock farming is sustainable and profitable for our farmers,” Wynne said.
