John Teeling goes cold on Norish fund raising

Veteran investor John Teeling has called on fellow shareholders in the Irish-founded, Aim-listed microstock Norish to rebel against proposals by its board for a fundraising to finance an expansion into Irish and US dairy farms.

Norish, which is chaired by Ted O’Neill and runs cold-storage units in the UK after selling out of the Irish market in the 1990s, has called a shareholders’ meeting in Dublin next month to approve a £5.1 million share placement.

Unnamed “new and existing” shareholders have subscribed to the placing, which was not opened up to all shareholders. This means it will effectively dilute the stakes of investors left outside of the process.

Norish also wants shareholders to approve a share incentive scheme for executives to award them more than 9 per cent of the company’s stock. Managing director-designate Kieran Mahon will be the first participant in the scheme, if he hits certain earnings targets.

Most of the cash will be used, the company says, to invest in the dairy industry in Ireland and also in Missouri in the US. It will also expand capacity in its UK cold-storage business.

Mr Teeling, who sold Cooley distillery for $95 million to the owner of Jim Beam in 2011, wrote to shareholders on Monday urging them to vote down all three resolutions proposed by management.

Tom Cunningham, who invested in Cooley alongside Mr Teeling, also signed the letter. The two men together control about 16 per cent of Norish.

Shareholding dilution

The letter told shareholders the placing would “seriously dilute your shareholding”. It also suggested the company has not got enough “dairy industry expertise” to expand into the difficult US market.

When asked for a response to the letter, Mr O’Neill declined to comment.

The letter by the two objectors said the plan to expand in the UK cold storage business was “good”, but they urged the board to borrow the funds required rather than raise fresh equity.