IG-ZAK-ALLY
BB :mad:
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I got a trade in or should i say a punt on 10,000 shares for 60 cents
Seems be rebounding nicely on news of bank finance. Surely Silver fern is still a big grey cloud over them?
Looks to be some good news coming.Quote:
Mediation agreed with Silver Fern Farms
PGG Wrightson and Silver Fern Farms have agreed terms on which a mediation process will
be conducted with a view to settling their dispute over the non-completion of the
partnership arrangement agreed in 2008.
The mediation will be conducted by former High Court judge Robert Fisher QC. Mr Fisher
has been in full-time practice as an arbitrator, mediator and consultant since leaving
the bench in March 2004.
The process will conclude by 18 April 2009, and will seek to achieve a full and final
settlement of the dispute.
The agreement to mediation was welcomed by PGG Wrightson chairman Craig Norgate as a
highly positive step towards settlement. “We are very encouraged by the willingness of
Silver Fern Farms to engage in the most constructive path available at this point. The
involvement of a highly experienced and respected mediator will assist greatly in
identifying the issues between the companies and, hopefully, achieving an agreement.”
The mediation agreement follows a formal admission by PGG Wrightson based on acceptance
that it breached the agreement with Silver Fern Farms by failing to settle the first
instalment of the transaction, that Silver Fern Farms’ subsequent cancellation was valid,
and that the only matter for determination is the amount of compensation to which Silver
Fern Farms is entitled.
No further comment will be made on the dispute, or on the mediation process, at this
point.
http://www.stuff.co.nz/business/anal...tumn-predicted
Got to be good news for PGW as well as the 16% jump in dairy price auction. Cocky's will probally save rather than spend for now but the longer term looks good.
Sellers seem to have dried up completly
Profit upgrades, bank debts sorted out and potential stock overhang out of the way.
Rural Portfolio funding deal good news for PGW
Duncan Bridgeman | Thursday March 19 2009 - 07:42am
Rich lister Baird McConnon will inject new equity into Rural Portfolio Investments – the investment vehicle he owns with PGG Wrightson chairman Craig Norgate – to cover payments to investors.
RPI had been facing a funding crisis as it relied on dividends from its 30% stake in PGG Wrightson to meet interest obligations on its two listed debt issues. RPI has $44.6 million in five-year redeemable preference shares maturing in April.
There were fears that because of PGG Wrightson’s own debt problems and sagging share price, RPI might have been forced to sell its stake to generate cash flow to cover its obligations.
But late yesterday RPI said it has negotiated new commitments – made up of equity and debt funding from Mr McConnon’s family company Aorangi Laboratories, and debt funding from New Zealand financial institutions.
Aorangi is also RPI’s parent company with a 50% shareholding.
The commitments are subject to completion of documentation between all parties. No other details were available last night.
RPI has a total of $102.5 million preference shares on issue.
News that Aorangi and institutions are willing to back the company further is good news for PGG Wrightson shareholders.
The consequences of RPI selling down its stake in PGG Wrightson at this stage of the economic cycle would have been awful. A selldown would have created a big overhang of shares and likely driven the PGW share price lower.
PGG Wrightson shares closed up 3.8% at $1.10 yesterday.
One point of interest is that institutions are willing to back this deal, while resins maker Nuplex struggles to gather support for its $110 million rights issue and share placement.
The market talked and the PGW share price has doubled from the low of 60 odd cents in a little over a month. I do feel sorry for those poor sods who panicked and sold out at the bottom, believing that 'the market must always be right'.
So what about those brave (or reckless?) who bought in at the bottom? I wasn't one of them. In truth this would have been IMO a very large gamble. Dr Who talks about the difficulty of establishing a net asset value, and being scared off buying because of that. Sorry, but with the possibility of a new capital raising and an associated unknown number of new PGW shares sold off at at 50c(?) is on the agenda, I don't believe anyone could have made a meaningful net asset value calculation, even with all of the hard 'facts' at your fingertips.
Similarly Scamper's historical p/e of 2.34, and dividend yield of 26.7% mean little when the number of shares that will be on issue in a years time might be a whole number multiple of the number showing on the share register right now.
Xerof was right. The only sensible buyers were the ones who had knowledge of the banking arrangement renewals before the general public.
So now that the market was 'proved' to be manic depressive by the subsequent PGW share price doubling, is now a good time to invest in PGW? I think there are still unknowns regarding the long term stability of cornerstone PGW shareholder RPI. Yes I read the newspaper quote:
"But late yesterday RPI said it has negotiated new commitments – made up of equity and debt funding from Mr McConnon’s family company Aorangi Laboratories, and debt funding from New Zealand financial institutions."
"Aorangi is also RPI’s parent company with a 50% shareholding."
"The commitments are subject to completion of documentation between all parties. No other details were available last night."
This is the same kind of announcement that came out when PGW announced the Silver Fern Farms merger as a 'done deal', and we all know what happened to that.
You see, we don't yet know the details of this new RPI funding. The above announcement was made from RPI's perspective with an understandably positive spin. If the institutions that are funding this deal had made the press release, who is to say it would not have been worded like this? :
"High flyer Craig Norgate has been exposed just like the Emperor of old and his new suit of clothes. His partners of substance the McConnen brothers have mortgaged all of their assets at our behest to put in capital and provide us with security should RPI fail in the future. Due to the high risk nature of the deal the interest we are charging RPI to allow RPI to just continue to operate is very high. This is a fantastic result for us the faceless institutions."
What do you think would have happened to the PGW share price if that was the press release that had hit the news stands?
SNOOPY
discl: hold PGW
Snoopy, answer me this. How come you listen to the market talking when it goes up - but not when it goes down?
I, too, feel sorry for those that sold at the bottom, but these were most certainly NOT people who believe that "the market is always right". Those that respect and listen to the market would have sold out at around $2.70 when the market began downgrading PGW last September. Even those using the usual "super conservative" 200 day moving average would have been out at around $2.30.
Snoopy, buying well is nowhere near as important as selling well. Big money was made by those selling PGW at $2.70 - and big losses have been made by those that ignored the market and hung on. If nothing else, the sellers now have that much more money with which to buy back in to PGW is they so desire.
http://h1.ripway.com/78963/PGW320.gif
P, I take it that the downtrend is broken and we have a 'Buy' signal?