September 23, 2025 • 8 mins
Alliance Group’s chairman Mark Wynne has all but shut down a letter penned by a group of farmers wanting to recapitalise the embattled processor themselves as providing “false hope”. Five current shareholders have pulled together what they describe as an “alternative finance proposal” to prepay its debt money from capital raised from farmers, retaining profits as well as selling “non-essential” assets. We talk with one of those shareholders, Mark Gunton of Argyle Station, who is also an Auckland property developer.
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Episode Transcript
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Speaker 1 (00:00):
So on yesterday's show we heard that the Alliance GRIP
chairman Mark Wynn had all but shut down a letter
penned by a group of farmers, high profile farmers too,
I might add, wanting to recapitalize the embattled Processor one
hundred percent farmer owned cooperatives. He said they were providing
false hope to other shareholders as that big vote happens
(00:20):
on October the twentieth. Let's talk to one of the
five people involved in that, Mark Gunton. Mark, I know
the other four farmers. You I haven't met. You're an
Auckland property developer. What are you doing chewing the air
of the Alliance group? If you don't mind me asking.
Speaker 2 (00:36):
I'm an ex Lincoln Boy social engine needed to want
to be a farmer. Don't come from a money background, Jamie,
and as a consequence, I've had to have a day
job to warn up, made to buy a farm so
I can watch it gets all over time. But I'm
have been farming for the last twenty three years in
the Waikai Valley over the road from Dave Pinkley on
(00:57):
Glen Area and James Anderson and I w a terray
station on my back boundary and.
Speaker 1 (01:04):
The other two Andrew Morrison, former chair or president of
Beef and Lamb New Zealand, and Mike Wilkins, who owns
or as part of a large farming conglomerates in the
in the Deep South. So there's five of you, your
large scull operators. You're all well healed. Is this rich
boys throwing the toys?
Speaker 2 (01:22):
No, not at all, Jamie. This is you know, people
reflecting on eighty years of farmer ownership and recognizing that
the sector that we're involved with has from time to
time gone through these ructions before, I mean more laterly
for Alliance and the I think of the nineties when
Paul was charged with rescuing the business. You know, there's
(01:46):
been a right sizing need in the industry since the
peak sheep of nineteen eighty two, and it's starting to happen.
In all credit to the Alliance board in terms of
what they've achieved so far. It just seems a pity
that on a back of the steps they put in
place with you know, the Smithfield sale with or closed
(02:06):
down will they assume will add twenty million dollars a
year debadar the eighty five million dollars they've spent on
their computer system that are now in a position where
we've got to sell a business to recover those costs.
Speaker 1 (02:20):
Why would a smart man like you, a property developer
you developed Auckland's Westgate shopping center, want to invest in
a meat company because it's a tough business, Mark Gunton,
that's losing tens of millions, even one hundred million dollars
a year would be a bit of a bad bet,
wouldn't it.
Speaker 2 (02:37):
The information we've been provided in respect of the notice
a median scheme book work suggests in the Northington Report
that the company in fact will will turn a profit
this year to the sum of circa eighty six million
dollars in terms of EBADA, of which I think forty
(02:58):
two million is contributing from associates. But they've done remarkably
will to turn that round, and we just feel that
there is still opportunity to improve further on that performance.
And it would be a shamed given the metrics of
the deal that are being undertaken, to see it disappear
from our ownership. In terms of my personal interest, Jamie,
(03:20):
it's simply I've got son, a son that's picked up
Argyle station. He wants his future in that sector of
the industry, and I think it's essential that we have
a Fonterra style cooperative within the red meat sector, just
to keep everybody honest.
Speaker 1 (03:37):
For one of the phrase, my understanding is that the
Alliance Group has to repay two hundred million dollars of
its working capital facility almost immediately or it's going to
be closed down by Christmas.
Speaker 2 (03:50):
Well, everybody's got this understanding, but is that actually the
commercial reality right? Everybody's walking around goodly saying there's an
understanding this has to be rep I think the extended
dating is now in December the twenty fifth. According to
Mark one, we are looking to the farming community for
the existing owners, the existing shareholders, those who actually owned
(04:11):
a business rather than those who represent theators, to have
an opportunity to actually recapitalize the business. Now. They came
to us on PDS format eighty months ago, and you
will appreciate, Jamie, the market for red meat was pretty
subdued at that point in time. Certainly there's been a
turnaround in the fortunes of the farming community. How long
(04:32):
that might go on before, we're not sure, but we
certainly hope it will last several years, but we don't
think now as a group collective, we don't think the
right move now is to sell the family silver.
Speaker 1 (04:44):
When we look at the average Alliance shareholder, I think
their average investment is something like fifty thousand dollars. They're
going to have to front up with another fifty thousand dollars.
As you pointed out, you tried to capital raise last year,
didn't work. Prices have improved a lot. Are you re
the room here? Is there an appetite from shareholders or
is it just you large shareholders?
Speaker 2 (05:06):
Well, this is exactly what we're trying to explore, right
And in Northington Report, Jamie, they suggest that there's no
appetite and be really interesting to know who they more
laterly canvassed on that opinion. But interesting in Jamie, if
you look at prinstance, the tie to a group of farmers, right,
they have a significant investment outside the farm gate. That's
the tie to Derry Coup and Mowa Kata Fonterra shiholders
(05:29):
have a reasonably significant investment outside the farm gate in
terms of their shares. Right in our particular situation Traga Station,
I think we've hold two hundred and eighty three thousand
shares and alliance, which represents about zero point zero zero
four percent of our enterprise value. So you know, to
(05:51):
put some more money into the kitty to maintain what
hasn't necessarily been the best performing business and usual in
terms of the redmen, SECTEM has actually sustained four and
a half thousand kiwis were there or thereabouts the last
eighty years in terms of employment. Is no bad thing
to have to do.
Speaker 1 (06:09):
I would have thought, are you leaving your run a
bit late because the farmer vote, the Farmer's shareholder votes
happening on October the twentieth, How can you pull a
deal together between now and then and convince the farmer
shareholders to vote in your favor.
Speaker 2 (06:22):
Arguably we are leaving a late Jamie, but better late
than never, right. I think it's a valid, valid commentary
from you. But our point would be that we have
been waiting on and trying to get information from the
company for some time. I mean, when they went through
this process to source capital, they prepared an im right
information memory, and we have as shareholders, have not been
(06:44):
privy to any of that information. Now more laterly marked
when has come out in terms of the correspondents that
we've put to the newspapers as we're living in fantasy
land or some such. Rather than saying that we would
love to see the information that he provided the im
what was his five year outrun in terms of performance
of the company.
Speaker 1 (07:03):
Can I just quote mark one back to you? He says,
if the vote fails on October the twentieth Dawn Meets,
could end up purchasing of the Alliance Group in an
insolvency process. That's, he says, the most probable outcome. That's
the Alliance Group's sold. Should I say at a firesale price?
That would be a disservice to the shareholders.
Speaker 2 (07:25):
Not to put too fine a point on it. The
big word that sentence is good. Right. The reality, Jamie,
is that we've we've already done effectively three hundred million
dollars worth of equity since twenty twenty two on a
Farmer side of the leisure.
Speaker 1 (07:41):
Right.
Speaker 2 (07:41):
If you go back to the twenty twenty two accounts,
Farmer's equity in the business unrealizable, I believe. But the
equity stated in the accounts was four hundred and forty
seven million dollars as a September thirtyth last year was
two hundred and eighty three million or two hundred eighty
eight million. Rather, on the back of this deal, it'll
be down to one hundred and thirty five. We'll have
thirty five percent shares of a company over which we
(08:03):
have no effect of control. But basically the farmer's abrogating
all the rights. We have no right to redeem our shares.
We have no right, no rights whatsoever in terms of
the Corporative Companies Act nineteen ninety six, they've all been suborn. Right,
so you would argue that one hundred and thirty five
million of equity that we've got left, they're picking it
(08:26):
up for free. They don't have to rely on us
for anything, arguably right. The controls are so limited, so
we've already done out though right.
Speaker 1 (08:34):
It is a very interesting debate. Both sides of it
will eagerly await the outcome. Of course, that big vote
coming up on October twenty. Hey, Mark Gunton, thank you
very much for your time today on the country.
Speaker 2 (08:47):
Thank you, Jamie. Take care
So on yesterday's show we heard that the Alliance GRIP
chairman Mark Wynn had all but shut down a letter
penned by a group of farmers, high profile farmers too,
I might add, wanting to recapitalize the embattled Processor one
hundred percent farmer owned cooperatives. He said they were providing
false hope to other shareholders as that big vote happens
(00:20):
on October the twentieth. Let's talk to one of the
five people involved in that, Mark Gunton. Mark, I know
the other four farmers. You I haven't met. You're an
Auckland property developer. What are you doing chewing the air
of the Alliance group? If you don't mind me asking.
Speaker 2 (00:36):
I'm an ex Lincoln Boy social engine needed to want
to be a farmer. Don't come from a money background, Jamie,
and as a consequence, I've had to have a day
job to warn up, made to buy a farm so
I can watch it gets all over time. But I'm
have been farming for the last twenty three years in
the Waikai Valley over the road from Dave Pinkley on
(00:57):
Glen Area and James Anderson and I w a terray
station on my back boundary and.
Speaker 1 (01:04):
The other two Andrew Morrison, former chair or president of
Beef and Lamb New Zealand, and Mike Wilkins, who owns
or as part of a large farming conglomerates in the
in the Deep South. So there's five of you, your
large scull operators. You're all well healed. Is this rich
boys throwing the toys?
Speaker 2 (01:22):
No, not at all, Jamie. This is you know, people
reflecting on eighty years of farmer ownership and recognizing that
the sector that we're involved with has from time to
time gone through these ructions before, I mean more laterly
for Alliance and the I think of the nineties when
Paul was charged with rescuing the business. You know, there's
(01:46):
been a right sizing need in the industry since the
peak sheep of nineteen eighty two, and it's starting to happen.
In all credit to the Alliance board in terms of
what they've achieved so far. It just seems a pity
that on a back of the steps they put in
place with you know, the Smithfield sale with or closed
(02:06):
down will they assume will add twenty million dollars a
year debadar the eighty five million dollars they've spent on
their computer system that are now in a position where
we've got to sell a business to recover those costs.
Speaker 1 (02:20):
Why would a smart man like you, a property developer
you developed Auckland's Westgate shopping center, want to invest in
a meat company because it's a tough business, Mark Gunton,
that's losing tens of millions, even one hundred million dollars
a year would be a bit of a bad bet,
wouldn't it.
Speaker 2 (02:37):
The information we've been provided in respect of the notice
a median scheme book work suggests in the Northington Report
that the company in fact will will turn a profit
this year to the sum of circa eighty six million
dollars in terms of EBADA, of which I think forty
(02:58):
two million is contributing from associates. But they've done remarkably
will to turn that round, and we just feel that
there is still opportunity to improve further on that performance.
And it would be a shamed given the metrics of
the deal that are being undertaken, to see it disappear
from our ownership. In terms of my personal interest, Jamie,
(03:20):
it's simply I've got son, a son that's picked up
Argyle station. He wants his future in that sector of
the industry, and I think it's essential that we have
a Fonterra style cooperative within the red meat sector, just
to keep everybody honest.
Speaker 1 (03:37):
For one of the phrase, my understanding is that the
Alliance Group has to repay two hundred million dollars of
its working capital facility almost immediately or it's going to
be closed down by Christmas.
Speaker 2 (03:50):
Well, everybody's got this understanding, but is that actually the
commercial reality right? Everybody's walking around goodly saying there's an
understanding this has to be rep I think the extended
dating is now in December the twenty fifth. According to
Mark one, we are looking to the farming community for
the existing owners, the existing shareholders, those who actually owned
(04:11):
a business rather than those who represent theators, to have
an opportunity to actually recapitalize the business. Now. They came
to us on PDS format eighty months ago, and you
will appreciate, Jamie, the market for red meat was pretty
subdued at that point in time. Certainly there's been a
turnaround in the fortunes of the farming community. How long
(04:32):
that might go on before, we're not sure, but we
certainly hope it will last several years, but we don't
think now as a group collective, we don't think the
right move now is to sell the family silver.
Speaker 1 (04:44):
When we look at the average Alliance shareholder, I think
their average investment is something like fifty thousand dollars. They're
going to have to front up with another fifty thousand dollars.
As you pointed out, you tried to capital raise last year,
didn't work. Prices have improved a lot. Are you re
the room here? Is there an appetite from shareholders or
is it just you large shareholders?
Speaker 2 (05:06):
Well, this is exactly what we're trying to explore, right
And in Northington Report, Jamie, they suggest that there's no
appetite and be really interesting to know who they more
laterly canvassed on that opinion. But interesting in Jamie, if
you look at prinstance, the tie to a group of farmers, right,
they have a significant investment outside the farm gate. That's
the tie to Derry Coup and Mowa Kata Fonterra shiholders
(05:29):
have a reasonably significant investment outside the farm gate in
terms of their shares. Right in our particular situation Traga Station,
I think we've hold two hundred and eighty three thousand
shares and alliance, which represents about zero point zero zero
four percent of our enterprise value. So you know, to
(05:51):
put some more money into the kitty to maintain what
hasn't necessarily been the best performing business and usual in
terms of the redmen, SECTEM has actually sustained four and
a half thousand kiwis were there or thereabouts the last
eighty years in terms of employment. Is no bad thing
to have to do.
Speaker 1 (06:09):
I would have thought, are you leaving your run a
bit late because the farmer vote, the Farmer's shareholder votes
happening on October the twentieth, How can you pull a
deal together between now and then and convince the farmer
shareholders to vote in your favor.
Speaker 2 (06:22):
Arguably we are leaving a late Jamie, but better late
than never, right. I think it's a valid, valid commentary
from you. But our point would be that we have
been waiting on and trying to get information from the
company for some time. I mean, when they went through
this process to source capital, they prepared an im right
information memory, and we have as shareholders, have not been
(06:44):
privy to any of that information. Now more laterly marked
when has come out in terms of the correspondents that
we've put to the newspapers as we're living in fantasy
land or some such. Rather than saying that we would
love to see the information that he provided the im
what was his five year outrun in terms of performance
of the company.
Speaker 1 (07:03):
Can I just quote mark one back to you? He says,
if the vote fails on October the twentieth Dawn Meets,
could end up purchasing of the Alliance Group in an
insolvency process. That's, he says, the most probable outcome. That's
the Alliance Group's sold. Should I say at a firesale price?
That would be a disservice to the shareholders.
Speaker 2 (07:25):
Not to put too fine a point on it. The
big word that sentence is good. Right. The reality, Jamie,
is that we've we've already done effectively three hundred million
dollars worth of equity since twenty twenty two on a
Farmer side of the leisure.
Speaker 1 (07:41):
Right.
Speaker 2 (07:41):
If you go back to the twenty twenty two accounts,
Farmer's equity in the business unrealizable, I believe. But the
equity stated in the accounts was four hundred and forty
seven million dollars as a September thirtyth last year was
two hundred and eighty three million or two hundred eighty
eight million. Rather, on the back of this deal, it'll
be down to one hundred and thirty five. We'll have
thirty five percent shares of a company over which we
(08:03):
have no effect of control. But basically the farmer's abrogating
all the rights. We have no right to redeem our shares.
We have no right, no rights whatsoever in terms of
the Corporative Companies Act nineteen ninety six, they've all been suborn. Right,
so you would argue that one hundred and thirty five
million of equity that we've got left, they're picking it
(08:26):
up for free. They don't have to rely on us
for anything, arguably right. The controls are so limited, so
we've already done out though right.
Speaker 1 (08:34):
It is a very interesting debate. Both sides of it
will eagerly await the outcome. Of course, that big vote
coming up on October twenty. Hey, Mark Gunton, thank you
very much for your time today on the country.
Speaker 2 (08:47):
Thank you, Jamie. Take care
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