Chairman of Warrnambool Cheese and Butter steps down after turbulent month
Warrnambool Cheese and Butter (WCB) has today announced a number of changes to its Board of Directors, including the resignation of their besieged Chairman.
David Karpin, Chairman, stepped down from the Board amidst a campaign led by shareholders to oust him from his position. Mr Karpin, who will be replaced by current Director Frank Davis, follows former CEO Neil Kearney in resigning in the wake of a cancelled capital raising after a price cut angered suppliers.
Tumultuous six weeks
WCB cut the price offered to farmers for milk at the start of last month, a move which was met with a mass exodus to rival dairy firms. As a result, the dairy business decided to reinstate the previous price and cancel a rights issue they were hoping would fund their 50 per cent cheese joint venture with National Foods. The rights issue was aborted because the reinstatement of the milk price forced a considerable profit downgrade.
Joint venture still on?
The company has since remained tight-lipped about funding for the cheese joint venture despite indicating it would still go ahead last month. An agreement with National Foods required WCB to come up with the $105 million needed for the deal to be paid by May 4, with interest to be paid if the funds were received after this date.
Mr Davis implied in a statement today that the joint venture was still on the cards but funding arrangements were yet to be finalised.
“WCB and National Foods Ltd have a strong working relationship and discussions relating to the retail domestic cheese business are continuing,” the incoming Chairman explained.
Other Board changes
Mr Craig Drake will remain on the board but step down as Deputy Chairman, a role which will be filled by current supplier director Mr Terry Richardson. Supplier directors Messrs Desmond McKinnon and John Renyard have also resigned from the board. Mr Bruce Vallance, currently an associate director, will become a supplier director.
“These changes are intended to continue a process of board renewal that will serve the best interests of shareholders and suppliers,” Mr Davis advised.
He added that the company would be seeking to fill vacancies as soon as practicable.
Mr Davis said the global economic crisis has had a dramatic impact on the Australian dairy industry, with positive signs now fortunately starting to emerge.
“Over the past month markets have been less volatile with demand for dairy products particularly milk powders holding up reasonably well and prices have been more stable,” WCB reported in a statement.