Rural News
Cards on the table time for PGGW
20th Feb 09, 1:26pm
by
Forget Fletcher Building, Telecom, Contact and all the others - PGG Wrightson's half-year result next week is the one everybody will be watching reports Business Day.The rural services company has, in short, a hell of a lot of explaining to do. Investors will want to know what the company proposes to do about its debt position. Has it a plan? Will investors be tapped for capital? The same investors will also want some explanations around PGW's unstable shareholding. PGG Corp has already indicated it wants out of its 22% holding. Clearly it has its hands full with its major investment Marac.
And then there is Rural Portfolio Investments, PGW's 30% shareholder, which is co-controlled by PGW chairman Craig Norgate and South Island businessman Baird McConnon. RPI has to repay $44.6 million of preference share money in April. How does it intend to do that? Finally in the litany of potential disaster, what about the snowballing battle with Silver Fern Farms?
It was extraordinary of PGW to make an unconditional offer to take a 50% holding in the meat processor before it actually had the cash to do the deal. By doing so it put its shareholders at risk of being done over by SFF if things went wrong. Now that appears to be coming to pass. So, the acid is on. Anything short of a full and frank explanation of the depth of problems the company (and its associates) face will leave the market extremely nervous and put further pressure on PGW.
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