Payment delay angers shareholders

28 Mar, 2014 01:00 AM
It would be nice for us all to be rewarded for our loyalty.

RAVENSDOWN chairman John Henderson has assured WA shareholders they haven't been forgotten and will get paid for their sold shares.

But they may have to wait five years to receive anything.

A recent spate of grower questions surrounding the sale of fertiliser business Ravensdown to global commodity trader Louis Dreyfus has prompted calls to Mr Henderson to clarify when the former co-operative's shareholders will receive payment for their shares.

In recent days Farm Weekly has fielded a number of calls from concerned growers and ex-Ravensdown agents who believed Ravensdown management had a duty to pay back the funds following alleged promises made late last year.

Most said Ravensdown had promised that once the sale of the business had gone through then shareholders would get their money back but the reality is it could take up to five years.

Last week Mr Henderson said despite the popular idea held by growers that Ravensdown was sold in early December 2013, the reality was that an unconditional contract was signed at that time which included a number of conditions to be satisfied – conditions which were outside the domain of Louis Dreyfus and Ravensdown's control.

Those conditions weren't satisfied until late December and payment by Louis Dreyfus then followed.

The problem now stands with Ravensdown's constitution which outlines that the company doesn't have to redeem shares until a shareholder has failed to purchase Ravensdown products for five years - a difficult thing to do when it ceases to exist in WA.

According to Mr Henderson, company management is now working through the issue to resolve whether it can exercise the right to pay back money using discretionary means.

Mr Henderson also said management had agreed to address the issue of redeeming Australian shares once the company had been officially sold to Louis Dreyfus and prepared a paper including its thoughts, comments and recommendations concerning the process of share repayments.

The paper was presented at Ravensdown's February board meeting but raised more questions than it answered.

Mr Henderson said as a result he wasn't comfortable with anybody making a decision about shares on the basis of that information so he suggested the formation of a sub-committee.

That committee was tasked with gathering all the board's questions about the payment process including those from the two WA directors as well as the New Zealand directors.

Those questions have since been collated, formed into terms of reference and sent to various parties, including Ravensdown's Australian and New Zealand lawyers, for clarification before the payment procedure takes place.

"They're working on it at the moment," Mr Henderson said.

"I was hopeful we'd have something back to look at in time for our March 24 board meeting but I now know we won't have that.

"We have New Zealand shareholders too and the company's act here in New Zealand sets out rules and constitutional guidelines we've got to follow."

It was also revealed the upcoming Easter break and a number of other Ravensdown commitments would mean the issue wouldn't be seriously addressed again until the company's next board meeting which was scheduled for the beginning of May.

Watheroo farmer and loyal Ravensdown shareholder Bill Scott has used Ravensdown fertiliser since the company began in WA and recently had a phone conversation with the chairman.

He said despite some email communication from Ravensdown outlining its payment intentions the large majority of growers were under the impression their payments would be made as soon as the assets were finalised in the Louis Dreyfus takeover.

"I think the large majority of grower shareholders have been expecting to be paid any day since the deal was finalised," he said.

"In January I was informed by Ravensdown that the issue would be resolved at its January board meeting.

"It would be nice for us all to be rewarded for our loyalty.

"Hopefully those involved will see sense and do it straight away otherwise it's going to damage what has been, up until now, a good reputation."

Ravensdown signed its agreement to sell its WA facilities and operations to Louis Dreyfus Commodities in September last year.

While an exact dollar amount wasn't revealed at the time, sources had previously told Farm Weekly the facilities were valued at about $25-$26 million.

In September, then Ravensdown chief executive officer Greg Campbell, said the sale would produce a good outcome for shareholders, staff and agents by giving more certainty over the transfer of ownership.

At the time he also said there were still some aspects of the deal to work through as part of the sales process and the aim was to conclude the deal before December 2013.

In January this year it was also revealed Louis Dreyfus would offer fertiliser under the name Macrofertil Australia following its purchase of Ravensdown.

While there was serious concern from growers the cost of fertiliser in WA would increase as a result of the sale, Louis Dreyfus chief executive officer, Robert Green, also said growers would only benefit from the acquisition.



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