After the dust settles on PGG Wrightson’s capital raising exercise, NYSE-listed Chinese company Agria Corporation will own nearly a fifth of New Zealand’s largest rural supplies and services company.

Today, PGW announced its plans to raise $180 million through issuing 401 million new shares at 45c each with an entitlement ratio of 9:8.

It was expected that Agria would hold 19% of PGW, up from the 13% stake it now has after Overseas Investment Office approval to buy $36 million announced in October. That approval gives Agria the ability to take advantage of the renounceable rights issue offering nine shares for every eight held.

In addition, Agria is to spend a further $25.6 million on cornerstone shareholder Rural Portfolio Investements (RPI) rights. RPI is reducing its stake in the company and won’t be taking up the rights offer.

RPI director Craig Norgate said the company was taking the maximum it could afford, but admitted he would prefer a stronger stake in the company. It was expected RPI’s stake would be between 11% and 12% at the end of the process.

Meanwhile, Pyne Gould Corp (PGC) will fully subscribe. It currently has a 20.7% shareholding. Following the share issue, it will hold 18.3%, reflecting dilution from the placement of the Agria shares.

PGW also plans to raise a further sum of about $32.5 million through a placement of the New Zealand dollar equivalent of $US25 million in convertible redeemable notes in the company to Agria. This ss expected to be completed on January 15.

The total amount being raised by the company is expected to be $249.4 million.


In addition, PGW expects to generate a net $70 million in cash during the 2010 financial year from operating cash flows, working capital reductions, the receipt of an outstanding fee payment from NZ Farming Systems Uruguay and the sale of non-core assets including saleyards and office and storage space.

The total reduction in outstanding debt up until June 30 next year is expected to be about $277 million.

Dates:

Nov 23: Settlement and allotment of Agria placement

Nov 26: Record date for determining entitlements

Nov 27: Existing shares quoted ex-entitlement on NZSX

Nov 27: Offer document and entitlement and acceptance form mailed to shareholders

Dec 14: Rights trading ceases on NSX

Dec 16: Rights offer closes

Dec 23: Allotment of new shares under the offer

Dec 24: Expected dispatch of shareholding statements for new shares

Jan 15: Issues of the convertible redeemable notes (Agria)