Namoi Cotton is well down the path towards a restructure that will see it switch from being the only co-operative on the ASX into a public company with growers and capital stockholders holding the same class of shares.
The move could see the company, which has operated under a dual-class structure for almost two decades, take on a larger role in the cotton industry, particularly given its heavyweight backers.
The $46.1 million Namoi counts the likes of global commodities giant Louis Dreyfus, which is its partner on the Namoi Cotton Alliance marketing and grain handling business, among its investors. The global merchant company holds 13.04 per cent, while Australian Rural Capital has 10.79 per cent and the Chris Corrigan-linked Kaplan Equity has 8.43 per cent.
Last year ARC partnered with Shanghai Pengxin for a tilt at the S. Kidman & Co pastoral empire and has indicated it is supportive of Namoi’s restructure and eager to contribute capital.
Mr Corrigan is, separately, executive chairman of walnut grower and water company Webster, which in June sold 21,901 megalitres of TandouΆs Lower Darling water entitlements for $78m.
The restructure will see grower members initially hold 23 per cent of the stock, with capital stockholders the remaining 77 per cent. The company is the countryΆs top cotton processing business and its 12 ginning businesses are complemented by its holding in NCA which handles lint marketing and commodity packing.
Namoi is planning a $35m entitlement offer as it looks to expand its core businesses and pursue related agricultural opportunities. The move could see the historic company expanding more aggressively and chase opportunities either in the cotton industry, agriculture, or possibly logistics.
The group could be well positioned as the cotton industry experiences further grower consolidation and improved crop varieties.
While there is a vote to come next month, Namoi says as a restructured company, it will also have the ability to use its shares as consideration for merger and acquisition opportunities.
Additional reporting: Ben Wilmot, Elizabeth Redman
