PGG Wrightson sells Heartland stake for $11.3 million to reduce debt
PGG Wrightson [NZX: PGW], the rural services company controlled by China's Agria Corp, sold its stake in Heartland New Zealand for $11.3 million to reduce debt.
Christchurch-based Wrightson sold 13.18 million shares in Heartland, the parent of the country's newest bank, through a brokerage yesterday at 84 cents a share, a 3.4 percent discount to the 87 cent share price Heartland was trading at immediately prior to the sale. Wrightson acquired the stake as part of the sale of its finance arm to Heartland.
"It wasn't a strategic holding for us, it's not our core business," said company secretary Julian Daly. The stock price "was at a level that we were satisfied with."
Wrightson this month posted a net loss of $306.5 million in 2013 from a $24.5 million profit a year earlier after taking a $321 million charge to write off goodwill from its 2005 merger and as the nation's worst drought in 70 years, and a drought in Australia, weighed on earnings.
The rural services company had $104 million of net bank debt as at June 30, down from $125 million the year earlier, according to its latest accounts.
Shares in Heartland fell 2.3 percent to 85 cents today, crimping their gain so far this year to 26 percent.
A large placement at a discount "can put a bit of a dampener on a stock in the short term," said James Smalley, a director at Hamilton Hindin Greene.
Shares in Wrightson gained 6.1 percent to 35 cents, and have dropped 25 percent so far this year.