Friday 20th April 2018
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T&G Global will sell its Kerikeri-based kiwifruit orchards, packhouse facilities and assets to Seeka, New Zealand's biggest kiwifruit grower, in a deal worth around $40 million, the two said in a joint press release.
Seeka will purchase T&G’s post-harvest facilities in Kerikeri for the packing and storing of avocados, kiwifruit and citrus. Additionally, T&G has agreed to sell all its 253,000 Zespri shares to Seeka, valued at about $2 million.
Seeka recently sold out of its 740,606 shares in Zespri Group after opposing constitutional changes at the monopoly export body that tie shareholdings to trays of fruit produced.
T&G is also selling approximately 80 hectares of kiwifruit orchards in and around Kerikeri to Seeka on which it currently grows the Hayward, ENZAGold and ENZARed kiwifruit as well as Zespri Sungold varieties. T&G will, however, remain the trademark owner of the kiwifruit brands.
T&G will also have access to fruit grown by Seeka for its existing customers in New Zealand and overseas.
Seeka said the deal is subject to Overseas Investment Office approval, if required.
The completion date for the post-harvest sale is expected to be April 30, and June 30 for the orchard sale. Seeka will then rename T&G’s Kerikeri facilities and operating business entities "Seeka Kerikeri."
Seeka chief executive Michael Franks said the company has identified the region as a growth area for both avocados and kiwifruit and establishing a post-harvest hub in Northland has been a priority.
"With new avocado developments in the area, we are expecting demand for post-harvest facilities to increase. We also anticipate increasing demand for kiwifruit as growing conditions have proven very favourable, particularly for gold varieties and with Seeka providing a new competitive dynamic to the market focusing on quality, price and service," he said.
T&G’s executive general manager, New Zealand, Andrew Keane, said the sale of T&G's kiwifruit operation is part of its intention to focus on core produce categories which will continue to include citrus and berries growth in Northland and other parts of the country.
“Our Northland berry and citrus operations are not included in our sale as we intend investing further in these growth categories. We have land ready for development and will be investing also in crop protection facilities for our existing operation in Kerikeri. We also hope to employ more people through these investments" he said.
T&G shares, of which BayWa owns 74 percent, last traded at $3.12 and have dropped 18 percent over the past year. Seeka shares last traded at $6.63 and are up 29 percent over the past 12 months.
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