Allied Farmers wants to buy back stake in NZ Farmers Livestock
By Tina Morrison
Nov. 3 (BusinessDesk) - Allied Farmers wants to buy back a stake in NZ Farmers Livestock that it sold down last year to pay debts.
The Stratford-based company said subsidiary Allied Farmers Rural agreed to buy a 9.3 percent stake, or 950 shares, in NZ Farmers Livestock from Stockmans Holdings through the issue of $1 million of new shares. It currently owns 57 percent of NZ Farmers Livestock, while Stockmans owns 27 percent, according to Companies Office records.
Last year, Allied sold 1,026 shares in NZ Farmers Livestock for $1 million to Stockmans and Agent Co to enable it to help repay $2 million owed to Crown Asset Management following the failure of its Allied Nationwide Finance unit.
Allied Farmers has said its focus for this year is to grow its Livestock business. It is increasing its stake in NZ Farmers Livestock after earlier in the year buying a stake in Hawkes Bay-based Redshaw Livestock. Last year, the company's livestock unit posted a 1.3 percent decline in sales to $14.7 million, while profit fell 11 percent to $1.21 million, as uncertainty over lower dairy payments weighed on sales in the second half of the year.
The company will seek approval from shareholders at its Nov. 24 annual meeting to increase its shareholding in NZ Farmers Livestock because its directors Oliver Carruthers and Bill Sweeney are also directors and shareholders of Stockmans.
Allied shares slipped 7.3 percent to 5.1 cents.
The new shares to be issued to Stockmans are valued at 5.19 cents apiece, which is the 20-day volume weighed average price of Allied shares one business day prior to Nov. 2. Should the VWAP be lower than 5.19 cents one business day prior to settlement, expected on Dec. 4, then shares to the value of $1 million would be issued at the lower price.