Three strands ahead

The wool industry restructuring bill is going through the final stages of the select committee process.

The committee is expected to report in a few weeks.

The bill will then go to the House and the Wool Board breakup will be formalised the moment it is passed.

At that point three new organisations will come into being.

Wool Equities will take a large chunk of the Wool Board's financial reserves and become a commercial operation.

A non-commercial "industry good" body will also be formed. It will be an incorporated society financed by commodity levies, and will undertake programmes agreed by farmers.

Wool Equities will have a 33 per cent stake and a 25 per cent stake respectively in biotechnology companies Ovita and Covita. It is also expected to formalise a relationship with the Wool Research Organisation.

An announcement on that is due this week.

A separate company called Merino Grower Investments will focus on fine-wool production in a joint venture with Wrightson.

A prospectus for Wool Equities will probably be issued in September.

About 13,000 farmers will receive $32 million worth of shares. A further $35.9 million will be issued as redeemable preference shares that can be cashed in immediately.

Farmers have voted to keep the share register closed for two years. Another vote will then be taken and it is expected the company will be listed on the stock exchange.