PGG Wrightson (PGW) and Silver Fern Farms have agreed the terms of a settlement following PGW’s default on an equity transaction agreed in 2008.
Under the agreement, PGW will pay Silver Fern NZ$25m (US$14.3m) and issue 10m ordinary shares to the company.
The two firms will continue to work on initiatives to integrate the supply chain from ‘plate to pasture’ to improve the strategic position of pastoral farmers.
Last month, Silver Fern Farms and PGW agreed to appoint retired High Court judge Robert Fisher QC, to mediate an agreement.
To conclude the settlement, PGW obtained what is effectively a NZ$25m loan from South Canterbury Finance, with the finance company holding the right to convert the debt to shares.
“I am delighted that both companies will now be able to put the disappointment of last year’s events behind them,” PGW chairman Craig Norgate said.
“For PGG Wrightson, the settlement provides certainty over the financial exposure resulting from our inability to complete the transaction approved last year. The settlement also establishes the basis on which both parties can continue to work in their respective clients’ interests under an integrated supply chain model.”
Silver Fern Farms chairman Eoin Garden said the settlement provided “significant redress” to Silver Fern Farms for the damages arising from PGW’s inability to complete the 2008 transaction.
Silver Fern Farms said it intends to remain a long-term shareholder of PGW.