close
MENU
1 mins to read

Rural Portfolio preference shares suspended

Trading in Rural Portfolio Capital, the investment vehicle of Craig Norgate and Baird McConnon, has been suspended after the company said it has breached its trust deed.RPC has $60 million preference shares on issue, which are under the guarantee of siste

NBR staff
Mon, 03 May 2010

Trading in Rural Portfolio Capital, the investment vehicle of Craig Norgate and Baird McConnon, has been suspended after the company said it has breached its trust deed.

RPC has $60 million preference shares on issue, which are under the guarantee of sister company Rural Portfolio Investments (RPI).

In a stock exchange announcement this morning, RPC said the preference shares would be cancelled but the move won't affect the claims holders have for the amounts owed to them.

The shares are secured by 44.15 million PGG Wrightson shares, 10 million shares in NZ Farming Systems and $742,314 held in an escrow account.

On April 16 RPI sold 48.4 million shares in PGW Wrightson to raise $27 million but RPC was unable to fully fund its Dividend Escrow Account (DEA).

The company must always hold enough to make its next payment. It’s next payment of $2.19 million falls due on October 15.

“The lack of any prospect of RPC or RPI fully funding the DEA by the end of the remedy period means they cannot meet their obligations under the trust deed as the fall due,” the company said.

On April 15 RPI paid out a $20 million dividend to RPC shareholders but under the terms of its security trust deed, it needed to ensure it had retained enough funds to meet its next dividend payment due in October.

RPI disclosed earlier this month it would breach the terms of the deed after it made the payment.

Under the deed RPI had 30 days to remedy the breach.

On April 15 next year the shares must be paid out in full, leaving RPI less than 12 months to come up with $60 million.

NBR staff
Mon, 03 May 2010
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Rural Portfolio preference shares suspended
4688
false