- June 11, 2010
- Posted by: admin
- Category: Historic Investments
Clover shareholders have given the thumbs up to Clover’s controversial proposal to sell over 9 million ordinary shares to top management and provide them with loans to buy the shares and refinance existing debt. They also approved the repurchase of all the ordinary Clover shares held by BEE partner Hosken Consolidated Investments (HCI) and its subsidiaries, as well as the repurchase of five million ordinary shares from Clover Industries Limited Stabilisation Trust. The proposed distribution to its preference shareholders, by way of a special dividend, of R4.10/preference share was also approved.
Once the special resolutions have been registered with the Companies and Intellectual Property Registration Office, the proposed transactions will be unconditionally implemented. It’s anticipated that this will happen around 2 June 2010.
Mike Willment, Clover Producer Forum (CPF) Underberg/East Griqualand area chairperson, said there were some reservations from certain producers but overall he thought it would be a good thing. “It’s something that needed to be done. We had a dual-share structure which wasn’t beneficial to anyone. If it allows Clover to run the business more efficiently, it’ll be good for producers – as long as they keep channels of communication open with us through the CPF.”
Willment said there were aspects that would benefit producers if all went according to plan. Clover shares are currently traded over the counter but a JSE listing is on the cards. “If it’s listed, there may be some benefit to the value of farmers’ shares. But as with all shares, only time will tell what that might be,’ he said.
Ixopo dairy farmer and dairy financial consultant Derek Broom said he felt that in the long term, the implications could be disastrous for farmers. “I don’t think it’s in the interest of farmers. It enriches both HCI and management at the expense of the farmer and I think it’ll create ongoing conflict in the future. It’s a bad decision. I think farmers are too gullible and don’t investigate things properly.”
“lt should’ve been put on hold, experts should’ve been appointed to look at it from a farmer perspective and look at recommendations for the way forward. The recommendation initially put forward was mainly from a management and HCI point of view, which I don’t think is In the best interest of farmers.”
Source: Farmers Weekly – Robyn Joubert