SHAREHOLDERS DECIDE: Templeton Ginger owner Shane Templeton is among shareholders who will decide Buderim Ginger's fate this month.
SHAREHOLDERS DECIDE: Templeton Ginger owner Shane Templeton is among shareholders who will decide Buderim Ginger's fate this month. CALLEJA MARK

Why Shane will leave Buderim Ginger board if sale goes ahead

THIRD generation Sunshine Coast ginger farmer Shane Templeton will step down from Buderim Ginger's Board of Management if the proposed part-sale goes to investors, including a Chinese company associated with snack foods, goes ahead.

Mr Templeton said he was supportive of the part-takeover proposed by Chinese firm Asia Mark Development Limited and Wattle Hill Fund and supported by Buderim Ginger's board, which will be put to a shareholder vote later this month.

Asked why he was moving on, he said it was "part of the deal" with Asia Mark and Wattle.

"I guess I've been there for a number of years now," Mr Templeton said. "There's a season for everything, and for me and the company another season is starting."

Buderim Ginger began in the 1940s as the Buderim Ginger Cooperative. The Templetons have been involved from the beginning.

Mr Templeton said he wasn't cutting ties with the company and was "humbled" the board had asked for his input as a consultant.

"I'll always be there for the company, and will want to be part of it in some way," he said. "We'll always be a supplier.             

"My family's been involved in the company since pretty much inception so if anyone asks I'd always give my opinion.

"We are an agribusiness, so certainly the company has to think of what's happening from the farmers perspective.

"In the end I am comfortable to step away…It's just part of the deal."

He said when considering whether to support the investment transaction, explained in more detail below, his motivation was the wellbeing of the company above his own financial interests as a shareholder.

"In the end all I want to see is the best for all the shareholders," he said.

"My grandfather always took the view that you have to put the company first. That's how you keep employing people.

"In the end I'll remain a shareholder of the company for as long as we choose to. I've got no plans to go anywhere and will not be walking away from the company."

Mr Templeton said there were few options for the struggling company.

"I think this is the better option," he said. "We haven't found anyone who has a better offer."

Asia Mark has a huge retail network that could significantly help sales, he said.

"If we tap into those 900,000 retail outlets in Asia that the new investors can offer then that could really turn things around for the company," he said. "With the Chinese market, that is huge."

As Buderim Ginger is a publicly listed company, the potential investors could have staged a hostile takeover by buying shares, he said.

"They stated they want a partnership with us," he said. "I actually think they see the value in partnering with Australians not just taking over."

His message for other shareholders deciding whether to support the move: "It is very emotive for people and I can see that and understand that.

"I've been thinking through that myself.

"But I still feel this is the best option for the company currently. It is always open for a superior proposal."


EARLIER: QiaQia Ginger? Chinese part-takeover bid for Buderim Ginger

BUDERIM Ginger shareholders have less than three weeks to decide whether to sell a 15% stake and further dilute existing shares, through an agreement with two investors including a Chinese company associated with a Chinese snack business.

Shareholders would also have their shares diluted from 100% ownership to between 57.9% and 38.6% ownership if they approve the agreement.

As part of the deal, founding director and Eumundi-based ginger grower Shane Templeton, whose grandfather was a founder of Buderim Ginger, will step down from his position on the board of management, making way for board members representing the new major shareholders.

If they don't make the sale, the Yandina-based business will have to find another solution to its dismal financial situation.

It processes, markets and distributes confectionery ginger, other ginger-based products and has tourism-related activities including at The Ginger Factory at Yandina. It also grows, processes and markets macadamias and macadamia-based products.

But it's in dire financial straits, suffering a loss of $9.1 million in 2015-2016.

Underlying factors for its poor financial performance include the "high discounting in ginger division to meet supermarket margin expectations to stay on shelf", a presentation summary for the upcoming AGM states.

The company could raise $26.6 million before expenses through the agreement with investors, Hong Kong-based publicly-listed Asia Mark Development Limited, and a private equity fund owned by Australian-based Wattle Hill Fund.

Asia Mark is associated with QiaQia Food Co Limited, a publicly listed company on the Shenzhen Stock Exchange that specialises in seed and nut-based snacks and has access to thousands of retail outlets in Asia.

The sale terms are not fair to existing shareholders, a report by independent expert KPMG has found. But the report also found the agreement was, in the absence of a better offer, in shareholders' best interests.

The terms proposed in the agreement assesses a share as having a less valuable trading range ($0.31-$0.46 per share) than KPMG's assessed underlying value ($0.53 to $0.95 per share), states the report dated November 16 and included as part of the Notice of General Meeting on the ASX website.

An in-house manufacturing facility, expansion of export markets, new product development and further vertical integration, as well as debt repayments, are listed as intended use of $26.2 million on page 25 of the Notice of General Meeting.

An annual general meeting on December 20 will hear the company's position, and a second meeting on December 22 will have shareholders vote on the proposed part-sale and other transaction terms with the potential investors.