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Farmers Vote For Change

Monday, 8 September 2008

Farmers Vote For Change

Farmer shareholders in Silver Fern Farms have voted overwhelmingly in favour of the partnership proposal with PGG Wrightson (PGW), taking a major step in securing a sustainable future for New Zealand's red meat industry.

75.62 percent of the votes cast were in favour of the partnership. The vote attracted a very high turnout, with more than 83.3 percent of the eligible votes being cast. Remarkably, 100 percent of the votes cast at the Special General Meeting today voted in favour of the proposal.

Eoin Garden, Silver Fern Farms' chairman, said he was delighted with the result and the support of shareholders. "We strongly believe partnering with PGW is in the best interests of Silver Fern Farms' suppliers and, going forward, the wider pastoral sector. This is not just about Silver Fern Farms and its shareholders; it's about the future of the red meat industry."

Under the partnership PGW will contribute $220m to recapitalise Silver Fern Farms, creating an entity with shareholders funds of $510m and an equity ratio of 80 percent. "It's an unprecedented injection of new capital into our industry, and farmers and shareholders in Silver Fern Farms will benefit significantly," said Mr Garden.

In a joint statement, Mr Garden and PGW chairman Craig Norgate said: "This is a great day for both companies and indeed the red meat industry in New Zealand. "We are excited by the opportunity to create a truly vertically integrated supply chain - from plate to pasture - that better serves the needs of international customers. We intend capitalising on the opportunities presented by an increasingly affluent and sophisticated international market, for high quality red meat products.

"Our relationship is based on a shared vision for the industry and an alignment of commercial drivers. That vision also extends to a committed drive for further industry consolidation, and this vote in favour of the partnership is a clear mandate from our shareholders to pursue this direction. We look forward to now being able to implement our strategies and to make positive and value enhancing changes for all stakeholders."

The partnership transaction is to be implemented by 1 October 2008.


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