PGG Wrightson to subscribe for full entitlement
16 November 2007
NZ Farming Systems Uruguay confirms one-for-two rights issue to accompany placement
PGG Wrightson to subscribe for full entitlement of 9 million shares
NZ Farming Systems Uruguay confirmed today that it will make a non-renounceable rights issue to existing shareholders along with the institutional placement announced earlier this week. Entitlements under the issue will be in the ratio of one share for every two currently held.
PGG Wrightson, which has a 10.6 percent shareholding in NZ Farming Systems Uruguay and manages the company under contract, has confirmed that it will subscribe for its full entitlement of 8,967,088 shares under the rights issue. The directors of NZ Farming Systems Uruguay will subscribe for a total of 2,875,000 shares.
A combined Investment Statement and Short-form Prospectus (Offer Document) for the rights issue has been registered today with the Companies Office and will be mailed to the shareholders of NZ Farming Systems Uruguay on Wednesday 21 November. The offer opens on 21 November and closes on 14 December. Shareholders eligible to participate in the rights issue are those who are registered as holding shares at 5pm on the record date, Tuesday 20 November 2007. NZ Farming Systems Uruguay has applied to New Zealand Exchange to list the shares following the close of the offer. NZX accepts no responsibility for the offer or any statement made in the Offer Document or this announcement. More information can be found in the Offer Document.
The net proceeds of the rights issue and the placement will be used to purchase additional farmland in Uruguay and develop intensive dairying, beef and other farming operations using New Zealand style intensive farming systems. The company already has 30,980 hectares of farms and farmland in Uruguay, at various stages of development.
Shares in the rights issue and the placement will be issued at $1.50 each. This is a substantial premium to the $1.00 per share pricing of the company’s Initial Public Offer (IPO), which closed oversubscribed in December 2006.
The Chairman of NZ Farming Systems Uruguay, Keith Smith, said the Board was pleased with progress on farm acquisition and development, which had been more rapid than expected at the time of the IPO. “We see further opportunity to grow value on behalf of our shareholders, based on additional scale and on the favourable conditions in the international markets for dairy commodities.”
The Chairman of PGG Wrightson, Craig Norgate, said the company’s decision to invest further in NZ Farming Systems Uruguay reflected the successful land acquisition and development programme and continued confidence in the company’s prospects. “PGG Wrightson has eight years’ operational experience in Uruguay and deep insight into international dairy markets, and we believe this investment represents fair value for our shareholders.”
The institutional placement and
non-renounceable rights issue are expected to raise a
$50 million, but oversubscriptions may be accepted under the placement.
No person, including PGG Wrightson or the directors of PGG Wrightson or the directors of NZ Farming Systems Uruguay, guarantees the securities to be issued under the offer.