4 May 2010

Norgate investors may get only half their money back

5:58 pm on 4 May 2010

The receiver of Rural Portfolio Capital and Rural Portfolio Investments says that at current prices investors will get only about half their money back.

The companies, owned by rural entrepreneur Craig Norgate and Baird McConnon, owe $60 million to 1400 investors.

Receiver Kerryn Downey, of McGrathNicol, says assets are estimated to be worth $30 million and include nearly 47 million PGG Wrightson shares, 10 million New Zealand Farming Systems Uruguay shares and $742,000 in cash.

Mr Downey, who is assessing the best way to repay investors, says one option is to hold onto the shares in the hope that PGG Wrightson and New Zealand Farming Systems Uruguay increase in value.

He notes, however, that shares in those two firms have plummeted in value over the past year.

Quick wind-up seen as best

Rural Portfolio Investments was formed to buy into Wrightsons and acquired 50%. But that slipped to 30% when Wrightsons merged with Pine Gould Guinness and was further diluted when PGG Wrightson issued more shares and others were sold to pay debt.

Mr Norgate says he is disappointed the situation has led to receivership but believes it is in the best interests of shareholders for the companies to be wound up quickly.

He will retain a small shareholding in PGG Wrightson and NZ Farming Systems Uruguay and is considering moving overseas, but says it is too early to speculate on his plans.