Pyne Gould's plans for Building Society shares

Wednesday 9th February 2011

Pyne Gould Corp's plans for its shareholding in Building Society Holdings (BSH) depend on whether Agria is successful in its partial takeover bid for PGG Wrightson.

Pyne Gould has agreed to sell its 18.3% shareholding in PGG Wrightson to Agria, which is seeking to buy 38.3% of the shares in PGG Wrightson to take its stake in that company to 50.01%.

Meanwhile, Pyne Gould subsidiary Marac Financial Services is holding 72.2% of the shares in the recently merged BSH, which arose out of the merger of Marac, CBS Canterbury and Southern Cross Building Society.

Today, Pyne Gould said that should Agria's PGG Wrightson bid become unconditional, Pyne Gould would not, as previously announced, need to conduct a placement of BSH shares, but would instead distribute its entire BSH shareholding to existing shareholders.

The placement was originally intended to fund repayment of an outstanding balance of about $27 million of loan notes issued by Pyne Gould subsidiary Marac Financial Services to BSH subsidiary Marac Finance.

It was now intended to fund repayment of the notes using proceeds of the sale of PGG Wrightson shares under the Agria offer, Pyne Gould said.

The distribution of BSH shares would be carried out through a scheme of arrangement, which would need court approval and Pyne Gould shareholder approval.

The timing depended on when Agria's offer becomes unconditional.

Pyne Gould said it also intended to use a portion of the cash proceeds from the offer to provide about $5 million of working capital and expenses for the ongoing Pyne Gould businesses.

Any remaining cash proceeds from the offer, together with any remaining PGG Wrightson shares which Pyne Gould continued to own as a result of scaling, would either be distributed to shareholders, or could be used to provide equity financing assistance to BSH for acquisitions.

NZPA

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