“The investment into the company is very significant and I think we could be on to a good thing.”
That shareholder and another contacted after the meeting said the proposal for Shanghai Maling to make a $261 million investment into Silver Fern for a 50% shareholding was well received by the farmers there.
About 50 shareholders were at the Little River meeting and one of them was Port Levy farmer Tim Coop, deputy chairman of the Meat Industry Excellence (MIE) group promoting the merger of Silver Fern with Alliance Group to form a bigger farmer-owned co-operative.
He agreed later that the Shanghai Maling proposal was well received but said the presentation was very polished and played to an extent on farmers’ emotions.
“My view was that the answers to questions on the future control of the company weren’t convincing.
“We’re told that it is a 50-50 partnership but the Chinese investor appears to have the great degree of control.”
Coop urged shareholders to carefully read the Grant Samuels financial report in the information pack they were receiving ahead of the vote on the proposal and to think very seriously about the control issue.
“I think some of the shareholders see it as a pennies-from-heaven investment but if we get it wrong it could be pennies from hell.”
The two other shareholders said they went to the meeting without a particular viewpoint on the investment proposal.
Afterwards, one planned to vote for the plan for the marketing gains it would provide to Silver Fern and the other was leaning that way subject to a read of the information pack.
The impact on Silver Fern’s status as a co-operative was not a deal-breaker for either of them.
One Banks Peninsula shareholder who had not been able to get to the meeting believed the capital upgrade would allow Silver Fern to do “everything it wanted market-wise”.
She trusted the advice of her livestock agent, who was keen on the new investment.
Coop agreed the Shanghai Maling deal appeared to have some momentum.
“It’s a short window for action and an Option B would have to come to the table very quickly,” he said.
