Tuesday, 25 October 2016 18:25

LIC plays safe on new business split

Written by 
LIC chairman Murray King. LIC chairman Murray King.

LIC has bowed to shareholder pressure by dropping its plan to transfer its herd testing and Minda businesses to a subsidiary.

The co-op will split its business into two on December 1: LIC will handle its core business while LIC Agritech will seek external capital to grow and boost shareholder returns.

LIC shareholders had expressed reservations about transferring herd testing and Minda to a company that could one day be publicly listed.

LIC chairman Murray King told its annual meeting last week that the process on the separation “has given us the opportunity to hear what you value about LIC”.

“We’ve heard your concerns about Minda and herd testing, and can confirm that after the [business] separation both will remain with the cooperative. Minda will be owned by the co-op but operated by the agritech company.”

He said forming an agritech company allows LIC to pursue opportunities for growth, with the potential to attract external investment and generate returns for investors.

“External funding will not flow into our core genetics business, but the separation creates an opportunity to attract external investors and potentially commercial partners to the agritech business, with shareholder approval.”

LIC has also listened to shareholders and dropped its goal to be a $1 billion revenue co-op.

“We are yet to develop a new goal or statement of purpose, and will work with the shareholder council on this,” Murray told shareholders.

A motion to increase the allowance of LIC directors was passed with a narrow margin at the annual meeting. LIC told the stock exchange that 405 shareholders cast 361,566 votes in favour, while 459 shareholders cast 292,982 against. – Sudesh Kissun

More like this

LIC ready for challenges ahead

Herd improvement company LIC says it's well-positioned for the challenges ahead and remains focused on its core purpose - delivering value for farmer shareholders.

Breeding heat-tolerant cows for Africa

LIC is embarking on a ground-breaking project aimed at breeding heat tolerant and disease resistant dairy cows for Sub-Saharan Africa, in collaboration with the global leader in precision breeding, Acceligen, and the Bill & Melinda Gates Foundation.

Scheme to pick high potential 'underdog' bulls

Holstein Friesian NZ, and herd improvement co-operative LIC have launched a joint sire proving scheme that aims to select and prove Holstein Friesian bulls for New Zealand dairy farmers.

Featured

Better animal genetic gain system

A governance group has been formed, following extensive sector consultation, to implement the recommendations from the Industry Working Group's (IWG) final report and is said to be forming a 'road map' for improving New Zealand's animal genetic gain system.

SIDE 2025's new schedule, venue

Annual farmer gathering, the South Island Dairy Event (SIDE), is set to make history as it heads to Timaru for the first time.

Taranaki piggery goes solar

Installing 400 solar panels at their Taranaki piggery and cropping operation will have significant environmental, financial and animal welfare benefits for the Stanley family.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

Milk Sustainability Centre launched

The recently announced Milk Sustainability Centre – a collaboration between global giant John Deere and milking and feed specialists De…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter