Ngāi Tahu Capital has taken a direct stake in PGG Wrightson, ending a seven-year relationship with Singapore-domiciled
Agria as the foreign investor's grip on the rural services firm remains uncertain.
Last Friday, the investment arm of the South Island iwi ended an agreement that pooled its investment in Wrightson with
Agria and Chinese agribusiness New Hope International. Ngāi Tahu Capital was a junior partner in the joint venture with
a 7.24 percent stake. At the time, it touted the $15 million investment as diversifying its portfolio and building
international relationships.
Ngāi Tahu has taken direct ownership of 27.4 million Wrightson shares, or 3.6 percent of the company, worth about $14
million at the current 51 cents share price. No consideration was paid, documents lodged with the stock exchange show.
The dilution of the joint venture means Agria and minor partner New Hope own 46.6 percent of Wrightson.
The future of Agria's Wrightson stake is up in the air, with the Overseas Investment Office reconsidering whether it
meets the 'good character' requirement. The OIO started investigating the stake after the US Securities and Exchange
Commission launched a probe into Agria.
Last week, Agria and its executive chair Alan Lai settled fraudulent accounting and market manipulation claims brought
by the SEC, without admitting or denying the charges. Both have been cooperating with the OIO's probe and Wrightson has
a committee of independent directors set up to assess whether there will be any fall-out for the company.
Agria first bought into Wrightson in 2009, helping bail it out from taking on too much debt in the failed merger with
Silver Fern Farms. At the time, the OIO cleared the investment on the grounds that it would create or protect local
jobs, boost export receipts, and also included an offer to sell riverbed and foreshore to the Crown.
It also included a research and development cooperation agreement to invest in and establish international joint
ventures.
When Agria set up the joint venture with Ngāi Tahu and New Hope to take control in 2011, the OIO approved it on the
grounds that it would boost exports, introduce new technology or business skills to New Zealand, and that the
involvement of a key person in an industry of another nation would benefit New Zealand. The earlier investment was also
a factor.