Sharechat Logo

NZSA criticises PGW finance sale

Friday 24th June 2011 1 Comment

Text too small?

The New Zealand Shareholders Association (NZSA) has poured cold water the proposed sale of the PGW finance arm to Heartland Building Society.

Chairman John Hawkins said, "This is another related party transaction of the type which has almost knee-capped our leading rural servicing business over the past five years at a time when NZ agriculture is enjoying record returns. We can see some strategic merit in moving the finance arm to Heartland, but this is not the best deal to achieve that."

Hawkins said the Association questioned how a modestly profitable asset that brings with it a large pool of performing loans, market dominance and significant funding lines could fail to fetch any goodwill at all.

The company has claimed that a sale at asset value only is the best that could be arranged.

Hawkins said "that seems extraordinarily pessimistic when PGW are transferring a loan book of $491million with all the doubtful liabilities removed or guaranteed by PGW."

He pointed out that eighteen really suspect loans totalling $90 million will remain with PGW. PGW will also guarantee a further eight loans totalling some $30 million. There seems to be a pretty significant transfer of assets while retaining most of the risk, he said.

The association said that this will undoubtedly be a good deal for Pyne Gould Corporation and Heartland. But it cautioned PGW shareholders to consider the implications for their own company very carefully before deciding whether or not to approve the deal.

The Shareholders Association was likely to vote its proxies against the plan, and hoped to send the directors back to come up with a more realistic offer for PGW shareholders to consider, he said.



  General Finance Advertising    

Comments from our readers

On 25 June 2011 at 1:12 am Tyron Argent said:
As a member of NZSA I asked the question about us offering our holdings for the Association to use but still wait for a answer. My Association should set the standard.
Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

New Zealand Rural Land Company Limited (NZX: NZL) Agreement to acquire large scale dairy asset portfolio
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto