PGW - PGG Wrightson

[Sideshow Bob]

A CFO leaving a company with financial difficulties. Never seen that before!

Share price got nailed 10% today.

[nwood]

PGG Wrightson Limited (PGW) and Silver Fern Farms Limited advise that as a
result of a recent mediation process they have agreed the terms of a full and
final settlement following PGW's default on the equity transaction agreed in
2008.

Under the terms of the agreement, PGW will provide Silver Fern Farms with a
mix of cash and PGW shares, and the two companies will continue to work on
initiatives to integrate the supply chain from 'plate to pasture' to improve
the strategic position of pastoral farmers.

The financial elements of the settlement are:
- $25 million paid today
- $5 million paid previously, of which $3.5 million was for costs incurred by
Silver Fern Farms
- 10 million ordinary shares in PGW (fully-paid and ranking equally with all
other PGW ordinary shares on issue).

The settlement was welcomed by PGW chairman Craig Norgate and Silver Fern
Farms chairman Eoin Garden as a successful resolution with which the boards
of both companies can be well satisfied.

"I am delighted that both companies will now be able to put the
disappointment of last year's events behind them," Mr Norgate said. "For PGG
Wrightson, the settlement provides certainty over the financial exposure
resulting from our inability to complete the transaction approved last year.
The terms of the
settlement have been approved by our banking syndicate and are well within
the company's capacity to manage financially. The settlement also establishes
the basis on which both parties can continue to work in their respective
clients' interests under an integrated supply chain model."

Mr Garden said the settlement provided significant redress to Silver Fern
Farms for the damages arising from PGW's inability to complete the 2008
transaction. "The resolution allows both companies to focus on optimising
outcomes in a challenging economic environment, rather than wasting resources
on protracted
litigation. This is a sensible and pragmatic 'NZ Inc' outcome."
Silver Fern Farms intends to remain a long-term shareholder of PGW.

[kiwi_on_OE]

$40m is a pretty big payout to have to make. Out of a $220m deal it must've almost been worth proceeding with the deal no matter what it took to get it done. I'm surprised a few of the bosses at PGW haven't had to justify keeping their jobs. Is that why the CFO resigned?

[nwood]

Share price seems strong

[The BOWMAN]

A fairly large drop today. Must be some insider trading going go. Capital raising announcement this week?

[Walfootrot]

Would you put more of your money into PGW if called upon to do so- not sure I would.

What are the upsides and what are the downsides?

[Dr_Who]

Would you put more of your money into PGW if called upon to do so- not sure I would.

What are the upsides and what are the downsides?

The question is, can Norgate afford to put more money into it?

[Walfootrot]

Yes- has Norgates charismatic dynamism worn thin?

[Snoopy]

Yes- has Norgates charismatic dynamism worn thin?

In today's announcement from PGC, about their upcoming cash issue, there was an update on that company's position with their 20% shareholding in PGW.

"PGC's approximately 20% stake in PGG Wrightson is to be retained and may be considered as a long term seed asset for a significant agri-business fund."

In my fast read haste, I thought the above announcement was the setting up of an 'Aggro' fund, specifically created for investors disenchanted with the managment direction of 'fund manager' Craig Norgate at PGW. Disenchanted investors in this new fund would then get a real chance to vent their spleen, while at the same stroke PGC would rid their balance sheet of a troublesome asset.

However, on further reflection I realised there are so many alternative 'Aggro funds' in the market already, that it would be foolish for PGC to go along this track as a "Johnny Come Lately".

SNOOPY

[Lizard]

Nice one Snoopy!

I thought the removal of the PGC overhang might have given PGW a lift today, but it appears not. Not at all sure about the overall PGC strategy though - is this a securitisation/investment banking model a la AFG, MFS etc? I'm not sure whether their timing is perfect or abysmal?