The first stage in the process of bringing together two farmer-owned wool companies has been successfully negotiated.
A special meeting of Wool Equities Limited on Friday passed resolutions to allow the Primary Wool Co-operative to take a 5 percent stake in the investment company.
Wool Equities chairman Cliff Heath said details such as the appointment of Primary Wool directors to its board now have to be worked through.
It will make Primary Wool the biggest single shareholder of Wool Equities, which has more than 9000 owners among sheep farmers who received a share of the business when it was set up with farmer money from the former Wool Board.
The arrangement will also provide funding support and a secure wool supply for the Bruce Woollen Mill in South Otago.
This is a busy time of year for the Primary Wool Co-operative, which is also leading a capital raising bid to buy a Christchurch yarn spinning operation out of receivership.
Christchurch Yarns was put into receivership in March, but has continued processing on a reduced scale to fill orders.
Primary Wool said it was the only serious, independent processor of wool carpet yarn left in the southern hemisphere.
Its target is to raise at least $3 million from farmers and other investors by Friday, 19 September.