Dawn Meats lifts Alliance investment to $270 million
Dawn Meats is set to increase its proposed investment in Alliance Group by up to $25 million following stronger than forecast year-end results by Alliance.
The farmers say they have secured credible alternatives to prevent the sale and keep Alliance 100% New Zealand-farmer owned.
They are calling on the Alliance board to consider their proposals.
The group's alternative plan involves capital contributions from shareholders, som asset-rationalisation and debt repayments via profits.
The plan would also make use of the ability to offset $191 million of tax-losses against future profits, which they say is an opportunity that would be given away in a majority sale.
Speaking for the group, agribusiness leader Jeff Grant says that on the back of recent restructuring, Alliance Group Limited (AGL) has achieved a significant turnaround and return to profitability.
"In this 'non-peak' year, AGL generated a profit of circa $20 million, a $90 million turnaround versus last year, and profit is projected at $75 million last year," Grant says.
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"The question farmers need to ask themselves before they vote is, why would we sell this critical asset at a time when red meat prices have never been better and global demand for our world-class protein is exploding?”
Meanwhile, former Beef + Lamb New Zealand chairman and Alliance shareholder Andrew Morrison says the group "has gone above and beyond to secure credible options, and we're now in a stronger position to be putting these forward to the board and fellow shareholders".
He says there are "critical benefits" to Alliance's processing infrastructure remaining New Zealand-owned.
"Shareholders have repeatedly expressed concern to the Alliance Board that we were not given the same opportunities, or access to the same information as Dawn Meats, to explore alternatives that could retain full ownership," Morrison says.
He argues that farmers need to vote against the Dawn Meats proposal because if it goes through "there's no coming back".
"There is a better way, the numbers prove it: Now is not the time to sell out, it's the time to invest in our business and the right people, to guarantee our best possible future," Morrison says.
"Let's get on with making this work."
