NZFSU considers raising US$135 million
New Zealand Farming Systems Uruguay (NZFSU), which develops and runs dairy farms in Uruguay, says it is considering a capital raising to raise up to US$135 million.
The listed company said a capital raising was consistent with the company's continuing strategy for growth.
As previously signalled, repayment of the US$110m short term shareholder loan from Olam International Ltd was due by December 31, 2012.
Singaporean-based food giant Olam International last year gained an 86 per cent stake in the listed company.
However it failed to get to a 90 per cent threshold of shares that would have allowed it to take 100 per cent ownership of the company.
There was strong opposition from a group of minority shareholders to Olam's takeover offer of 70 cents a share.
Olam now has about an 86 per cent stake, New Zealand farmers and rural investors hold about 14 per cent.
NZFSU said funding was also required to meet the remainder of the capital works programme and to replenish the current funding lines used to meet operating cash requirements, the company said.
In afternoon trade NZFSU shares were untraded and last traded at 57c, giving the company a capitalisation of NZ$132.9m.
A committee of independent directors had been appointed to address the capital requirements and was expected to report to the NZFSU board by early October.
The company was considering a rights issue to raise up to $US135m, or approximately NZ69 cents per share, by way of a pro rata rights issue to be supported by Olam.
No money was being sought and no applications for securities would be accepted or money received unless the subscriber had first received a simplified disclosure prospectus.
NZFSU said it made a loss of US$7.6m for the year ended June 30, narrower than the US$8.7m loss in the June 2011 year.
Earnings before interest and tax for the year was a profit of US$5.2 million compared to a loss of US$4.3 million for the 2011 year.
This year's result included a fair value adjustment to livestock of US$10.1 million and nil herd improvement.
This compared to a 2011 US$7.5 million fair value adjustment in 2011 and a US$8.1m herd improvement.
Excluding the fair value adjustment the result for the year is a loss of US$17.7m, narrower than the 2011 loss of US$24.2m.
Earnings before interest and tax before the fair value adjustment and herd improvement for the year was a loss of US$5.9m compared to a loss of US$19.3m for the 2011 financial year.
This EBIT result fell short of the break even position indicated in the half year report to shareholders and is outside the range of a US$3m to US$5m loss as indicated in a market update in mid June.
This was due to lower milk revenue and higher foreign exchange losses.
- © Fairfax NZ News
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