The feud over which organisation will represent the majority of New Zealand strong wool growers has escalated.
The issue is between the proposed Wool Partners Co-operative (WPC), which is trying to establish itself in a $55 million to $65 million farmer-funded float, and the long-established New Zealand Wool Exporters Council, which is openly criticising the proposal.
Earlier this week, WPC amended its prospectus and for the third time extended its deadline for farmer subscriptions to February 16, partly to appease growers' concerns about how the new entity would be established, funded and operated.
WPC chairman Jeff Grant is optimistic that with $35 million in $1 farmer subscriptions raised so far - representing 56% of the total $65 million sought - the venture will succeed.
However, Wool Exporters Council executive manager Nick Nicholson says the $35 million represents only 27% of the strong wool clip, meaning WPC will not have the majority of strong wool growers backing it.
"Gaining a commitment for only $35 million, and indicating that a lower level of subscription of $55 million [may be sought by WPC], must seriously question the ongoing viability of Wool Partners Co-operative," he said in a statement yesterday.
The WPC prospectus made a "big point" that gaining 50% of the strong wool clip and $65 million was a minimum requirement for WPC to proceed and was therefore the basis of its financial forecasts, he said.
"So if they are going to accept a lower level of subscription, how are they going to finance their business," he asked.
Mr Nicholson said the extensions to the float must have "blown ... to smithereens" the Wool Partners Co-operative float budgets, meaning it was going to need more than originally projected, not less as WPC now seemed to propose.
"This means they will have no mandate and no majority of strong wool growers backing them. If I was an investor, it would scare the life out of me and I would be asking for my cheque back right now."
He said that a recently released Horizon Research survey, commissioned by the exporters' council, had found 70% of woolgrowers "have not, and do not intend to, invest in the $65 million capital raising".
However, Mr Grant said the "small print" of the Horizon Research noted that of the 618 "farming industry respondents", just 205 were actually strong wool growers, and he questioned the methodology of the survey.
Mr Nicholson said that in October, Wool Partners International (which is proposed to be absorbed into WPC and includes a $24 million bank debt) claimed to handle 40% of the strong wool clip.
"[This] seems to indicate even their own clients are deserting them at a time when they needed to pick up new business and not lose it," he said.
Mr Nicholson said he "took exception" to Mr Grant's comments that the exporters and private merchants had undermined the capital raising and had been lobbying wool growers.
"We have only dealt in facts and asked a few hard questions. Clearly, they don't like the scrutiny," Mr Nicholson said.
In an earlier release, the wool council said while 205 of the 618 respondents were strong wool growers, the balance was made up from "people managing farms, producing strong wool, or people servicing the wool and strong wool industry".