National Foods-WCB cheese joint venture remains in limbo
The Warrnambool Cheese and Butter (WCB) cheese joint venture deal with National Foods is on the back burner as the dairy company seeks to get their business back on track.
WCB has met with a number of difficulties since first signing the joint venture agreement in December last year. They cut the milk price offered to suppliers on April 1 this year, but were forced to reinstate the previous price after a backlash from farmers. This ensured a profit downgrade and a subsequent cancelling of a rights issue planned to help pay the $105 million owed to National Foods.
With farmer confidence in the company plummeting, the company’s CEO resigned. Their Chairman, David Karpin, has now also stepped down amid a major shake-up of the Board.
The flow-on effect is that the date for settlement of the transaction with National Foods has now passed and still there is no sign of closure.
Managing Director of WCB, John McLean, said that the deal remained in a state of flux as they sought to get the company back on track.
“We may go back to the market, we may go back to the banks, we may not require as much money, I don’t know,” he told the ABC. “It’s in a parked situation at the moment. The main thing is to get the core business or the company back in shape.”