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PGG Wrightson debt holders agree to finance unit’s sale

Published: Mon 15 Aug 2011 05:57 PM
PGG Wrightson debt holders agree to finance unit’s sale
Aug. 15 (BusinessDesk) – PGG Wrightson Ltd.’s bond and debenture holders have agreed to the sale of its finance unit to Heartland New Zealand Ltd.
Some 96% of bondholders owed $92 million agreed to the deal, while 99% of secured depositors and 89% of unsecured depositors supported the deal, bringing Heartland closer to taking on the Wrightson finance unit. Each vote needed 75% to cross the threshold.
“We will see a continuation and expansion of the services currently offered by the rural finance provider under Heartland ownership,” Wrightson Finance chief Mark Darrow said in a statement.
The would-be bank had its BBB- investment grade credit rating put on negative outlook last week after Standard & Poor’s said it was unhappy with the lender’s earnings outlook and exposure to legacy property loans.
Heartland will pay for the Wrightson unit by raising $35 million from existing shareholders, via a share purchase plan, in a deal underwritten by Pyne Gould Corp. for $10 million and by Impact Capital Management, a private company representing interests of South Island investors, the Tomlinson family.
PGG Wrightson and Pyne Gould Corp. will each buy $10 million of shares in Heartland through private placements.
The deal will be finalised after the capital raising is complete and the Treasury signs off on the transaction.
In June, the New Zealand Shareholders’ Association said the $100 million acquisition undervalued the $491 million loan book.
Shares in Heartland were unchanged at 58 cents and Wrightson stock was also unchanged at 46 cents.
(BusinessDesk)
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