Wrightson capital return gets shareholder approval
By Paul McBeth
July 23 (BusinessDesk) - PGG Wrightson shareholders have again given the rural services firm the thumbs up to a capital return in a tax-efficient way.
Shareholders voted overwhelmingly in favour of a scheme of arrangement to distribute $234 million to investors following the sale of the company's seeds division. Wrightson will undertake a two-for-one share split, followed immediately by a 31 cent payment per share to cancel one of every two shares.
The practical effect of the transaction is that investors will end up with the same number of shares and receive a 31 cent per-share payment, which won't be treated as a dividend for tax purposes.
The resolution attracted 521.3 million shares or 99.95 percent of the votes cast at a special meeting in Christchurch. Just 267,000 votes were against, and 1.6 million abstained.
"Following this endorsement by shareholders we will now make application to the High Court seeking final orders to implement the scheme. Assuming orders are made by the court, we would expect the scheme to be implemented with payment made to shareholders in early August," chair Rodger Finlay said in a statement.
The company has already got initial court orders relating to the scheme.
A second resolution to amend the constitution to comply with new NZX listing rules also passed, with 98.8 percent support.
Wrightson shares were unchanged at 55 cents and have increased 7.8 percent so far this year.
The rural services company always intended to return a portion of the proceeds to its shareholders after booking a $120 million gain on the sale of the division. DLF Seeds paid $413 million for the Wrightson unit and took on $21 million of net debt. Wrightson initially flagged a return of up to $292 million.