Farmind to cut Seeka stake to reduce foreign ownership

Seeka shareholder Farmind to cut stake to reduce foreign ownership

By Paul McBeth

April 27 (BusinessDesk) - Seeka's biggest shareholder Farmind Corp will cut its stake in the fruit grower to reduce the company's foreign ownership below the Overseas Investment Office screening threshold.

At today's annual meeting, the Te Puke-based company told shareholders its Japanese investor Farmind will today transfer a 6.55 percent stake in Seeka to New Zealanders in an off-market trade to reduce the company's foreign shareholding base. Farmind owned 16 percent as at Dec. 31, making it Seeka's biggest shareholder, but after the transaction, it will drop to second behind Sumifru's 12 percent holding.

More than 25 percent of Seeka's shares are owned by overseas people, and "there is potential for this to have a negative effect on Seeka given the nature of our business," the company said in a slide accompanying chair Fred Hutchings' presentation published on the NZX.

Farmind's sell-down will mean Seeka is no longer an overseas person as defined by the act and will let it waive the Overseas Investment Office approval condition of its $40 million acquisition of Kerikeri orchards.

Seeka will monitor its foreign ownership levels and update the market every six months, and "will put overseas investors on notice through a public announcement of the implications of making an investment in Seeka (particularly without OIO approval) and inviting any foreign investor to contact Seeka in advance of investing".

The company's focus on foreign ownership comes as politicians review a proposed amendment to the legislation to tighten the foreign investment screening regime.

Farmind's decision comes after local fruit exporter Scales Corp chief Andy Borland this month said his company's classification as a 'New Zealand person' under the legislation was an advantage in acquiring domestic agriculture businesses.

Seeka shares fell 0.8 percent to $6.50.

(BusinessDesk)

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