31 Oct 2008

Hitch in rural giants' partnership deal

12:51 pm on 31 October 2008

The rural servicing company PGG Wrightson has indicated its partnership deal with Silver Fern Farms may not go ahead in its current form.

PGGW was stymied from finalising its purchase of a 50% stake in the meat co-operative at the end of last month, when it couldn't get the necessary bank credit approvals to cover the first instalment of the $220 million payment.

It was hoping to close the deal this month.

But PGGW's chairman, Craig Norgate, told the company's AGM on Thursday, that because of the on-going chaos in world financial markets, it's unlikely to be able to complete the transaction within a time frame that would be acceptable to Silver Fern.

Mr Norgate says they haven't given up on the wider objective of getting farmers better returns from red meat and if necessary they'll look at other ways of achieving that.

Silver Fern has confirmed that it's still in discussions with PGGW.