Nearly 250 employees at Nelson’s Alliance plant will be eagerly awaiting news of a shareholder vote on an overseas partnership next week.
Alliance, which operates six plants around the country including Nelson’s, has lost about $165 million in the last two years alone and now needs to pay back around $188-200m borrowed from six banks by December 19.
Irish company Dawn Meats is offering to buy a 65 per cent stake for $250m to meet the banks’ deadline.
The Dawn Meats offer has obtained Overseas Investment Office approval.
The deal needed at least 75 per cent of shareholder votes in favour, and those voting in favour must represent at least 50 per cent of the issued shares.
Alliance Group general manager safety and processing, Wayne Shaw, says the $250m “capital injection” would strengthen Alliance’s balance sheet and enable ongoing investment across the plant network.
“We know there is strong interest in what the proposed strategic partnership with Dawn Meats Group would mean for our plants, including Nelson.
“The proposed transaction is subject to shareholder approval and detailed planning before any operational changes can even be considered.
He says the Nelson plant “continues to perform well”
“With a successful recapitalisation of Alliance, we look forward to growing our business further.
“Alliance will continue to focus on optimising our processing network and improving efficiency, in line with our strategic goal of ensuring livestock farming remains a commercially viable land-use option for our farmers. That approach will not change.
“We believe our plant network is well balanced between livestock volumes and processing capacity.
“We understand the importance of Nelson to our farmer-shareholders, the 240 employees at the plant and the region, and we are committed to keeping them informed as this process progresses.”
Alliance has been a farmer-owned co-operative since 1980. Alliance Group chair Mark Wynne said the announcement comes after a two-year process to reset and recapitalise the business.
“We are at a critical point where the business needs to evolve, but our commitment to farmers remains the same, and we believe Dawn Meats’ offer stands to secure and strengthen Alliance’s future.
The vote outcome will be announced on Tuesday, 21 October, following a Special General Meeting in Invercargill on Monday.
