Namoi Cotton Co-operative Ltd (AX:NAM) and Louis Dreyfus Commodities Group (“Louis Dreyfus Commodities”) today jointly announced a proposal for the establishment of a cotton marketing and commodities packing services joint venture (“Joint Venture”) to be called Namoi Cotton Alliance.
Under the proposed Joint Venture, Namoi Cotton will hold a 51% controlling interest and Louis Dreyfus Commodities will hold a 49% minority interest. The Joint Venture will hold Namoi Cotton’s cotton marketing and commodities packing assets, for which Namoi Cotton will receive $30.38 million.
Namoi Cotton will also raise approximately $3.65 million from the issue of 14,327,384 Namoi Capital Listed Stock to Louis Dreyfus Commodities.
Importantly, the fundamentals of Namoi Cotton’s business will remain unchanged. It will continue to own and operate 100% of its ginning and cotton seed businesses, maintaining these critical supply chain activities for Growers.
Namoi Cotton Chairman, Stuart Boydell said: “Today’s joint announcement represents the culmination of Namoi Cotton’s cornerstone investment strategic initiative which commenced in early 2012. This strategic initiative was embarked upon to deliver liquidity for business development opportunities, enable flexibility around our working capital requirements and strengthen our balance sheet”.
“The Namoi Cotton Board believes the Louis Dreyfus Commodities’ offer represents compelling value and is in the best interests of Namoi Cotton Grower Members and Namoi Cotton. The Board is unanimously recommending that Namoi Cotton Grower Members vote in favour of the Proposed Resolution in the special postal ballot.”
Namoi Cotton Chief Executive Officer, Jeremy Callachor said: “Namoi Cotton Alliance will draw on the extensive industry experience of Namoi Cotton, in conjunction with the financial capacity, global marketing expertise and risk management skills of Louis Dreyfus Commodities. The Joint Venture will create a strong cotton marketing business whilst retaining important Grower Member co-operative involvement. The capital raised will strengthen Namoi Cotton’s balance sheet.”
Louis Dreyfus Commodities Australian CEO Robert Green said: “Namoi Cotton Alliance will undoubtedly support Australian cotton growers in international markets long-term, while allowing the global Louis Dreyfus Commodities business greater exposure to additional Australian cotton volumes to meet the needs of its international customers.”
“This investment by Louis Dreyfus Commodities in established infrastructure and logistics operations in Australia illustrates the group’s desire to build stronger engagement with Australian growers, as the basis for our immediate and longer term growth goals,” he said.
Namoi Cotton will seek the approval of its Grower Members by special postal ballot (75% majority) for the establishment of the Joint Venture. It is anticipated this ballot will be completed at or around the end of February 2013.
Further details will be provided to Grower Members and the market in coming weeks through the release of a Grower Booklet, which will contain information explaining the impact on Namoi Cotton of the Joint Venture.
For further information please contact:
Mr Jeremy Callachor
Chief Executive Officer
Namoi Cotton Co-operative Ltd
+61 7 4631 6104
Mr Robert Green
Chief Executive Officer
Louis Dreyfus Commodities Australia Pty Ltd
+61 3 9828 6111
For media enquiries, please contact:
Namoi Cotton – Media Advisor
+61 418 730 339
Louis Dreyfus Commodities Australia Advisor
+61 417 389 675