Silver Fern raises lower-than-expected $21M in first count of rights offer

Friday 9th October 2009

Silver Fern Farms, the South Island meat cooperative transforming into a publicly traded company, raised a lower-than-expected $21 million from its rights offer, based on an initial count of subscriptions.

The rights were part of the meat processor’s offer for its farmer-suppliers to exchange their 57.5 million rebate and investment shares for new ordinary shares that will trade on the Unlisted platform. Holders of 38.8 million shares, 67.5% of those on issue, had participated in the exchange by the time it closed today.

The farmers also had the right to subscribe to subscribe for two new shares for each ordinary share held, raising up to $128 million, and take up a one-for-four bonus issue. Just $21 million was raised though the count was as of yesterday and last minute applications may boost the final amount.

“While the level of capital investment was on the lower end of expectations, this can be attributed to the previous three years’ low returns and farmers’ current focus on debt reduction versus investment,” chairman Eoin Garden said in a statement. The capital raising isn’t considered a success or failure as the company had no immediate call on the funds, he said.

Silver Fern’s shareholders approved the capital restructuring after the failed merger with PGG Wrightson last year.

Businesswire.co.nz

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