Published 26 March 2008
Dairy Equity Ltd has received preliminary High Court approval for an arrangement that will allow it to return up to $28.9 million (31.7c/share) to shareholders over the next 5 months.A special shareholder meeting to approve the proposed capital return has been set for Thursday 10 April at 11am at the Auckland Club. The company resolved at its annual meeting on 11 December to investigate the steps necessary to realise the company’s investments and return the net proceeds to shareholders.The board has since sought expressions of interest for the purchase of its assets – its SWAP book, its intellectual property & its NZSX listing.
Chairman Peter Jensen said: “While Dairy Equity received interest in both its listing & its SWAP book as a whole, this interest was not on terms acceptable to the board. The company has, however, made arrangements with farmer SWAP counterparties for the end-of-season resale/redemption of 25% of its SWAP book at prices equal to or better than the carrying book value of $6.79/share.“The directors believe the best way to maximise shareholder value for the remaining Dairy Equity assets is to maintain the company’s NZSX listing while continuing to explore sale opportunities. By remaining listed, shareholders also retain the ability to sell their shares on-market.”Mr Jensen said the company proposed to return capital in 2 instalments – an initial $22.88 million payment in April using currently available cash, followed by $6.1 million in August. The second payment would be conditional on confirmation that it be treated as a capital return for tax purposes. It will be made substantially from the proceeds from SWAP sales redemptions. The first payment represents 25c/share and the second 6.7c/share, leaving residual net tangible assets of around 18c/share.
12 December 2007: Dairy Equities shareholders vote to realise assets
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Attribution: Company statement, story written by Bob Dey for The Bob Dey Property Report.