19 Feb 2009

PGG urges mediation to settle claim

9:59 pm on 19 February 2009

PGG Wrightson is asking the Silver Fern Farms meat co-operative to take part in a formal mediation process to settle a compensation claim.

Silver Fern is seeking compensation for the rural servicing company's failure to complete a partnership deal last year, in which PGG Wrightson was to pay $220 million for a 50% stake in the meat company.

PGG Wrightson says it is not aware of the amount of damages sought by Silver Fern, but says it will set aside $10 million against a claim.

It says that would provide a payment on top of the $3.5m costs incurred by Silver Fern.

But PGG Wrightson chairman Craig Norgate says that, beyond that, it still wants the two companies to work together on an integrated meat industry supply chain. That includes a stock procurement arrangement which was part of the original partnership agreement.

He says the best way of achieving that would be through formal mediation before a retired High Court judge.

However, Silver Fern chief executive Keith Cooper has criticised PGG Wrightson's move to go public with its offer after the meat co-operative had already rejected the $10m compensation figure.

Mr Cooper has accused it of trying to negotiate through the media.

Mr Cooper says Silver Fern's board will consider PGG Wrightson's offer of mediation before making a formal response.