Court rules in favour of Norco
The Norco Co-operative will take full control of the Norco Pauls joint milk venture after the Brisbane Commercial Court yesterday ruled in favour of Norco going ahead with its $50 million takeover.
After becoming aware of Norcos intention to take 100 per cent ownership of the joint venture, Italian food giant Parmalat initiated legal action to prevent Norco acquiring its 50 per cent share in the business.
Norco CEO, Murray Richardson, said he was delighted but not surprised by yesterdays decision as Norco had always been confident of its rights.
The recent restructuring and relisting of Parmalats former parent company Parmalat Finanziaria SpA on the Italian stock exchange triggered a change in control of Parmalat Australia, which under the terms of the joint venture agreement gave Norco the right to acquire Parmalats 50 per cent stake in the business, he said. The acquisition will give Norco access to processing margins, which should allow us to pay our suppliers a better price and expand into new markets and introduce new product lines. Weve been in consultation with our financiers for some months and both they and we are confident of our capacity to manage the transaction.
After Parmalat commenced proceedings against Norco, the Co-operative initiated separate legal action to ensure Norco would have exclusive rights to the Pauls brand once the joint venture takeover was finalised.
Mr Richardson said Parmalat had no legal grounds on which to withdraw Norcos right to the exclusive use of the Pauls brand, however, the matter is yet to go before the courts.
The clause that supposedly allows them to terminate our exclusive use of the brands was discussed, but was never included in the final agreement document it does not exist, he said. The joint venture has operated very successfully with exclusive use of the Pauls brands for almost a decade, and we do not expect that to change.
In the 2004/05 financial year the Norco Pauls joint milk venture turned over $95 million.