Farmers deliberate share sale in Icelandic food processing company Kjarnafæði-Norðlenska following surprise announcement

Over 460 farmers are deliberating whether to sell their shares in Kjarnafæði-Norðlenska, an Icelandic food processing company. The chairman of the board says that the majority are waiting for answers to specific key questions before making a decision.

The sale of Kjarnafæði-Norðlenska to Kaupfélag Skagfirðinga, an Icelandic cooperative, was announced recently, impacting approximately 500 farmers who own shares in the company via the holding company Búsæld. The chairman of Búsæld has announced plans to hold a meeting with the farmers to discuss the next steps.

Many were shocked when the sale was reported in the media on Sunday. Information about the sale was leaked to the media before it was possible to inform the company’s employees and shareholders.

Today, the owners of Búsæld are expecting a notification from the company clarifying their position. Together, they own 43% of Kjarnafæði-Norðlenska. Soon, a meeting will be called where farmers can ask burning questions. For instance, they want to know if the company will continue to operate as a separate unit, whether farmers can expect higher prices for their products, and they desire a more detailed explanation of how the efficiency improvements will be handled.

After that, the 464 farmers can decide whether to follow the footsteps of the two largest shareholders, who sold 57% of the company in recent days.

On average, the farmers own well under 0.1% of the company each, and therefore, the amounts at stake are relatively low for most. When Búsæld owned 100% of Kjarnafæði-Norðlenska, the company had been running at a loss for several years, so the farmers’ shares were only decreasing in value. No shareholder in Búsæld expected to make any profit from this asset. Its primary purpose, given the situation in the meat market when it was established, was simply to secure slaughter and comparable prices for their products, just like elsewhere.