Rob Hewett, Chairman of Silver Ferns Farms, said the Board remains unanimous in its view that the 50:50 partnership with Shanghai Maling is in the best interests of shareholders and the Co-operative ahead of a shareholder requisitioned Special Meeting.
The Special Meeting will be held at Silver Fern Farms’ Dunedin Corporate Office, 283 Princes Street, Dunedin at 1pm on Friday, 12 August 2016.
“In October 2015 shareholders approved our partnership with Shanghai Maling by an emphatic 82% of votes cast,” Mr Hewett said.
“If anything, the imperatives and potential benefits for Silver Fern Farms from this transaction have increased since then. Shanghai Maling’s $261m investment for a 50% stake in Silver Fern Farms’ business is clearly in the best interests of the Co-operative. This investment will put Silver Fern Farms into a strong financial position, provide the capital to accelerate our ‘Plate to Pasture’ strategy globally and to invest in technology, equipment and improving plant efficiencies. Our business will also have a privileged position in China – the fastest growing market for red meat in the world.”
Mr Hewett said despite 82% of votes cast supporting the partnership, Messrs Shrimpton and Gallagher want to stop the transaction from completing.
“We are frustrated and disappointed that Messrs Shrimpton and Gallagher have encouraged a small group of shareholders to question the approval obtained last year, that they have required the Co-operative to hold this further Special Meeting, and that they are continuing to agitate for the transaction to fail.
“The allegations of Messrs Shrimpton and Gallagher have been strongly refuted by the Board, and independent bodies have found no basis for them:
- The FMA has reviewed and found no issue with the 2015 Special Meeting.
- The Registrar of Companies has found no evidence that Directors have acted in anything other than the best interests of the Co-operative and its shareholders.
- Independent expert Grant Samuel has reaffirmed its view that the transaction is fair and reasonable to shareholders.
- Grant Samuel has also assessed the financial basis and confirmed the Board’s assessment that the Shanghai Maling transaction is not a major transaction for Silver Fern Farms.
“Subject to Overseas Investment Office approval, Silver Fern Farms is bound to complete the transaction with Shanghai Maling. This meeting – whether the resolution is passed or not – cannot change that.
“The Status quo is not an option. Our disappointing financial performance this year illustrates again the volatility of the industry and the risks associated with our current capital structure. We remain under lender pressure to address these issues.
“The Board believes Messrs Shrimpton and Gallagher do not appreciate, and so are not fairly or accurately representing, the prospects and risks of any refinancing and restructuring the Co-operative would need to undertake should the Shanghai Maling investment not proceed.”
Mr Hewett said the Board recognises that given the situation some shareholders may choose not to participate in this meeting.
“If shareholders do choose to vote, your Board encourages a vote in favour of the resolution.
“We appreciate many shareholders have already voiced their continuing strong support for the transaction to proceed, and indicated the expense and timing of this Special Meeting is a major inconvenience. We have provided multiple voting options in recognition of this,” he said.
Information on voting is laid out in the Notice of Meeting being posted to Shareholders and is also available online at www.silverfernfarms.com/governance