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Alan McConnon steps down from Wrightson board

Wednesday 5th May 2010

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Alan McConnon, who sits on the board of his family’s investment vehicle Aorangi Laboratories, has stepped down as a director of PGG Wrightson following the failure of his brother Baird’s Rural Portfolio Investments.  

Rural Portfolio, majority owned by Aorangi and with Craig Norgate as the other shareholder, was placed into receivership this week by the trustee for its preference share holders after a shortfall in its dividend escrow account put it in breach of its trust deed.  

Trustee Executors appointed Kerryn Downey and Andrew Grenfell of McGrathNicol as receivers, and they will take control of 46.8 million Wrightson shares, 10 million NZ Farming Systems Uruguay shares, and $742,314 in its escrow account, worth about $30 million in total. That’s half the amount owed to holders of the preference shares, which were suspended from trading this week. 

Wrightson’s board thanked Alan McConnon in a statement on the NZX. The shares were unchanged at 55 cents, and have declined 8.6% this year.  

RPI disclosed a shortfall of $1.45 million in its escrow account, which requires a total of $2.19 million be held for its Oct. 15 dividend payment, and last week, sold about half of its stake in Wrightson, 6.4%, or 48.5 million shares, for 56 cents apiece, raising $27 million, using the funds to repay debt. 

The investment vehicle’s cash flow hit a roadblock when Wrightson suspended its own dividends expected in October 2009 and this month.

At the same time, its holding in Wrightson was diluted by Wrightson’s placement and rights issue, which RPI didn’t participate in.

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