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Asset sales for PGGW for debt repayments

Rural News
Asset sales for PGGW for debt repayments

Asset sales will help PGG Wrightson meet a $125million bank debt repayment deadline at the end of next year, but none of the company's businesses - and certainly not the finance arm - will be sold, says chairman Craig Norgate. The debt, part of a $475m refinancing agreement negotiated with the ANZ, BNZ and Westpac in March, would be repaid with around $85m from cash profits and $40m from minor asset sales and working capital reductions, Norgate says in the Farmers Weekly. Asset sales would be the "odd spare block of land, the odd spare building".  "We have been through our refinancing process and we've got a clear focus on what we want to do and achieve and the only asset sales we are looking at are on the periphery. We're not looking to sell any business and certainly the finance offering is absolutely core to our customer relationship." "There will be constant change, but the sort of costs we are taking out are more back office overheads. It's 2 1/2 years post-merger (PGG and Wrightson) and when you're growing a little bit of fat creeps into the system and at times like this you take it out," Norgate says. The poster boy for bold change in the agribusiness sector is catching his breath after a torrid few months for PGW, of which his personal investment vehicle Rural Portfolio Investments (RPI) owns 30%.  "It's been exhausting. But we have a very good team." PGW's share price crashed in February, losing more than half its value and wiping more than $200m off the rural service company's market capitalisation. At time of writing the price had recovered to $1.36 after plummeting to a year-low of 59c in February, from a 52-week high of $2.90.

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