Co-Operative Capital Units as a Solution to Co-Operative Financing

Centre for Entrepreneurial Management and Innovation (CEMI) Discussion Paper Series No. DP1201 (ISSN 1448-2541)

15 Pages Posted: 5 Mar 2012 Last revised: 9 Oct 2012

See all articles by Elena Mamouni Limnios

Elena Mamouni Limnios

The University of Western Australia

John Watson

The University of Western Australia

Tim Mazzarol

University of Western Australia

Geoff Soutar

The University of Western Australia

Date Written: February 1, 2012

Abstract

A major issue for many co-operative enterprises is the ability to raise capital to fund growth. Considerable attention has been given to facilitating access to non-member capital sources and managing and accommodating such financing. This paper examines the merits of a new financial instrument known as the Co-operative Capital Unit (CCU), introduced in Australia to increase the co-operative sector’s flexibility in raising capital. Using a Delphi Panel approach the likely attractiveness of alternative CCU structures in terms of ownership rights, profit distribution, market facilitation and governance options were examined. We conclude that a CCU is likely to be of most value as an equity (rather than debt) instrument and propose CCU taxonomy depending on co-op ownership rights. We further propose an equity capital structure for a newly funded co-op to illustrate how CCUs could best be used to address some of the generic challenges facing co-ops.

Keywords: co-operative enterprise, financing, equity, co-operative capital unit, Delphi panel, conjoint analysis

Suggested Citation

Mamouni Limnios, Elena and Watson, John and Mazzarol, Tim and Soutar, Geoffrey N., Co-Operative Capital Units as a Solution to Co-Operative Financing (February 1, 2012). Centre for Entrepreneurial Management and Innovation (CEMI) Discussion Paper Series No. DP1201 (ISSN 1448-2541). Available at SSRN: https://ssrn.com/abstract=2015636 or http://dx.doi.org/10.2139/ssrn.2015636

Elena Mamouni Limnios

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

John Watson

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia

Tim Mazzarol (Contact Author)

University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia
+618 6488-3981 (Phone)
+618 6488-1072 (Fax)

Geoffrey N. Soutar

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

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