PGGW float seen as relatively successful

Trading in PGG Wrightson's rights for new shares ended yesterday, marking a significant point in what is now seen as a successful capital raising reports Business Day. The rights issue will remove a debt cloud from the rural services firm, and should see PGGW's share price increase, market commentators say. PGGW's $249.4 million capital raising, including the $180.7m rights issue, will enable it to pay back $200m to banks in March 2010. The fact that a significant number of the rights have been taken up by investors has also removed any pressure on underwriters. The rights have been trading since November 27 at prices between 10c and 18.3c and on daily volumes of between two million and 17 million-plus. Hamilton Hindin Greene director Grant Williamson said the fact the rights held by cornerstone shareholders had been retained or traded between those parties meant there was less pressure on other shareholders. The selling pressure on PGGW head shares should now disappear, given the relative success of the capital raising. "I think it's pretty much a forgone conclusion the underwriters will not end up with a large overhang, with the large holders accounting for all their rights." Under the capital plan, Chinese firm Agria Corp will jump to the top of the share register with a 19 per cent stake. It will take that spot from Rural Portfolio Investments, owned by Craig Norgate and the McConnon family, which falls to No 3 spot on the share register with a 12.4 per cent stake. Pyne Gould Corp is taking up its rights to maintain its stake at about 18.3 per cent.