SFF goes to farmers for more capital

Up to 40% of shares in Silver Fern Farms could be traded on the Unlisted market in new capital restructuring plans for the meat processor and marketer announced yesterday.The plans could raise as much as $128 million in new capital reports the NZ Herald. Controls would be put in place to ensure supplier shareholders always owned 60% of voting rights and single shareholders or groups of associated shareholders would be limited to 5% of the total issued capital. SFF chair Eoin Garden was confident of getting shareholder support, but said the restructuring package was also a vote by shareholders whether they wanted the meat industry to change from being production driven to market-led. He said the near-doubling of lamb prices this season was due to a worldwide shortage and a more favourable exchange rate and not because of structural changes to the industry.The status quo or this restructuring package were the only options for the company's 20,000 shareholders to consider, he said. We're not talking alternatives, this is the only proposition. The only alternative is do nothing and that is not an option for the industry." SFF was then independently valued at $440 million, but ABN Amro Craigs broker Peter McIntyre said the paying of debt and the dilutionary effect of increasing the number of shares could revalue Silver Fern at between $375 million and $400 million. Total assets, according to last year's annual report, were $690 million. * Suppliers to hold minimum of 60% of voting rights. * Balance may be traded on the Unlisted market. * Participating farmers would be able to subscribe for up to two $1 shares for each of the shares they already hold. * Single shareholders or groups of associated shareholders limited to 5% of total issued capital. * Company's 20,000 shareholders to vote on July 30. * Needs the support of 75% of eligible voting shareholders to proceed.