Cashmere float

Press, 8 February 1986, Page 23

Cashmere float

Cashmere Pacific, Ltd, has launched its prospectus — offering a public pool of 1.5 M 50c shares to finance a goat breeding and fibre production business. The issue is for almost 6M ordinary shares. Nearly 5M are reserved for the promoter, organising broker and Stock Exchange member clients. Cashmere Pacific will rent a 942 ha scrubby hill farm — already developed for goat farming — in the hills behind Wellington for an annual rental of $50,000. The three-year lease carries renewal rights for a further six three-year periods. The issue, opening on February 28, will raise S3M. Of this, $1.47M will go to buy stock — 5700 feral does at an average price of $2OO and 132 cashmere bucks at $2500 each. The company will spend $265,000 on stock management equipment and upgrading the farm. A fibre separation plant will cost $150,000 and $300,000 will be used in the first year to cover issue costs.

Market price fluctuation, stock mortality and genetic fertility risks are the major risks in the new enterprise, the directors say.

However, a letter from a Scottish cashmere garment manufacturer, Kinross Cashmere, Ltd, says that about 7M goats in Australia and New Zealand were needed to produce the present 1000tonne global shortfall for the high-quality fibre. At present Australia and New Zealand produce only 30 tonnes a year. Cashmere is the fine insulating down produced by alll feral goats and has to be mechanically separated from the guard hairs which make up the majority of its fleece. A good doe will yield around 200 g of cashmere.

In its cashflow projections, Cashmere Pacific aims to earn $240,000 in stock sales and $64,000 in fibre sales in the 16 months to balancing next year. By 1990 it projects a closing cash balance of more than $1 million, earnings per share of 25c and 10c dividends.

Cashmere Pacific’s chairman is Mr Frederick Turnovsky, former DFC chairman, currently holding directorships with Cory-Wright and Salmon, Ltd, AWA (NZ), Ltd, Maori International, Ltd,

and Dominion Salt, Ltd. The directors are: Businessman and goat-farmer Mr Rae Ah Chee, the treasurer of the Cashmere Producers of New Zealand; investment banker and First National Finance Corp, principal, Mr Toa Pamare; Massey University fibre science and animal breeding

specialist Dr George Wickham, and Mr Harvey Wu, a partner with Wellington accountants, Peat, Marwick, Mitchell and Co. The issue is being underwritten in full by AMP Financial Corp.