By Russell Palmer
New Zealand’s largest agriculture technology and services provider PGG Wrightson has bought back notes issued to its major shareholder Agria and transferred the loan to its banking facilities, which have been extended to July 2014 at a cheaper interest rate.
PGG sold the Convertible Redeemable Notes as part of a deal with Agria of Singapore in January 2010. Agria currently holds 50.2 percent of the shares in PGW. It paid $33.85 million for the notes, up $150,000 on the original selling rate of $32 million, which does not include the 8% interest since the CRNs were issued.
The company’s chief financial officer Rob Woodgate told BusinessDesk the loan has been transferred to its two banking facility loans, which have increased by “almost the same amount” as the cost of the CRNs.
The $75 million and $125 million facilities, plus the roughly $33 million for the CRN notes, have been extended to July 2014 at a lower interest rate, which he declined to disclose.
PGG Wrightson’s shares are selling at 37c today, down from 55c per share a year ago. It made a net loss of $30.7 million for the 12 months to Jul. 30, but made a $23.3 million profit in the same period in the previous year. This year’s loss was attributed to the Canterbury earthquake in the last annual report.
Agria Corp. completed its $144 million partial acquisition of the company in May, giving it control of the rural services company five months after its bid was launched.
Agria's bid, launched in conjunction with Chinese agricultural giant New Hope, represented a 25% premium on Wrightson's share price at the time.
The Singaporean company, which originally sought to lift its ownership to 50.01% at 60 cents a share, received acceptances from shareholders speaking for 78.16% of Wrightson's stock.
Wrightson sold its financial unit to would-be bank Heartland New Zealand earlier this year, and Heartland last month dipped into its surplus cash reserves to retire $92.3 million of its acquisition bonds.
(BusinessDesk)
16 Comments
"New Zealand’s largest agriculture technology and services provider"
With a market cap of just $286m, share price down from over $2 to 0.38c, last dividend paid in 2005. More like " New Zealands largest Joke "
They couldn't even manage to make any decent money in the oldest of oldest scams, i.e "The Management Contract, suck dry the shareholder" trick , via NZ Farming Systems Uruguay.
http://www.pggwrightson.co.nz/Userfiles/files/Market%20Announcements/20…
The new owners are only interested in the agronomic property Pgg has in it possession.
Where are the xenaphobs when you need them?
Yes agreed Shagga, however i have no concern with the likes of the Synlait buyout, after all it's only bricks and mortar. Foreign investment in the provinces can be very much a win win if the structure is right, here is a perfect examlpe of how foreign investment can work.
http://www.miraka.co.nz/Home.aspx
Checkout the last photo in the photo gallery and compare it to the home page photo for the perfect visual proof of this.
Interesting link Neil. In the short term you are probably right re the win win but med too long term I only see that continueing if Fonterra stays strong, otherwise you risk being be screwed down over time. Witness the history of the meat, wool and arable industries.
Depends in what capacity Fonterra is going to operate SS. Appears Fonterra leadership and executive believe in capital structure foisted upon co-op when amalgamating, as suits strategy of securing and selling fresh milk behind boarders, eg China, Latin America, Australia, and maybe India. Fairly risky and capital hungry, not suited to a NZ supplier owned co-op, needs to be hybredised into a corporate, and that's what's happening with TAF. This will be to the ultimate demise of farmers receiving true value for NZ milk through belonging to a co-op.
I know a couple of farmers who are basicly broke, one was with BNZ they have been trying to get rid of him for years, lucky for him Heartland stepped up and took him on, I hear similar stories from other areas. Im not a conspiracy therorist but if one was you could be forgiven for thinking that the major banks are dropping the bad loans into heartland for the taxpayer to bail out sometime in the future, done with the blessing of the NZRB, but what the hell would I know, I must be an idiot , I still farm sheep.
I'm still bloody dark my old man got bailed out on his SCF investment. The last fella who needs a bailout, as I suspect most of the investors were, and if people had their entire holdings in these schemes, getting what 7.5 to 8%? returns prior to collapse, they deserve the loss. Plain idiocy and greed and our taxes are already well stretched so pop, give us back our money!
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