NZ Farming Systems pays out PGG Wrightson, shares fall
By Paul McBeth
Dec. 23 (BusinessDesk) – NZ Farming Systems Uruguay Ltd., which was forced to tap majority shareholders Olam International for US$50 million this week, has paid out former manager PGG Wrightson Ltd.
The South American farm developer tapped Olam for funds because Farming Systems wasn’t able to source a new line of credit on better terms. Some $25.5 million went to Wrightson to cover outstanding management fees and to complete the contract buy-out.
Farming Systems will continue to use Wrightson as its preferred supplier for buying farm inputs. Farming Systems' shares dropped 6.5% to 58 cents, and have jumped 27% this year.
Olam agreed to provide Farming Systems with short-term funding after it lifted its stake to 78% of the company in September for some $120 million, including the original purchase of 18% from Craig Norgate, who had a key hand in creating Farming Systems.
Wrightson said it will use the funds to repay bank debt. Its shares fell 2% to 48 cents, and have dropped 19% this year.