Satara-Eastpack abandon merger after Psa outbreak

By Paul McBeth

Dec. 1 (BusinessDesk) – Kiwifruit growers Satara Cooperative Group and Eastpack Ltd. have abandoned a proposed merger, with Eastpack’s credit lines drying up after the outbreak of Pseudomonas syringae pv actinidiae.

Satara said its board pursued all avenues to keep the deal afloat, but wasn’t able to achieve this. Its balance sheet is relatively strong after a property sale earlier this year, and it predicts the impact of the Psa bacteria will be minimal.

The cooperative first suspended its shares on Nov. 8 after MAF Biosecurity discovered the vine canker at a kiwifruit orchard on the North Island. Psa has now been confirmed in 80 orchards, most of which are situated near Te Puke.

The kiwifruit industry and the government are jointly funding a $50 million compensation package to manage Psa. The affected orchards make up less than 1% of the nation’s $1.5 billion kiwifruit industry.

The disease has been identified in kiwifruit for at least 25 years but has not previously been found in New Zealand.

Psa has caused significant damage to Italian kiwifruit production in recent years, but it is not yet known what effect it would have on the kiwifruit industry in New Zealand if its presence here was confirmed.

To date, no export restrictions have been placed on New Zealand grown kiwifruit themselves, but the movement of plant material into Australia and the U.S has been banned.

Earlier this month Biosecurity Minister David Carter told the press that one or more countries could use the outbreak as grounds to block kiwifruit imports.

Trading in Satara’s shares came off a halt after the close, and last traded at $1 on Sept. 10.

(BusinessDesk)

ENDS

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