7 Jul 2009

Silver Fern Farms plan good for investment - report

7:43 am on 7 July 2009

Silver Fern Farms' proposed restructure will attract new investment while retaining the important features of a co-operative, an independent report concludes.

The report, by Deloitte, says the restructure allows the company to attract new equity from its shareholders in the future.

Silver Fern Farms is asking farmer-shareholders for $128 million as it seeks to reduce debt and chase investment opportunities.

The meat co-operative's capital raising, in a two-for-one cash issue, follows the failure of last year's proposed merger with rural services provider PGG Wrightson, when the rural services firm was unable to raise the necessary funds.

Silver Fern Farms also says it made an after tax profit of $61 million in the nine months to the end of May, compared with a half-year loss of $6 million, although it points out the nine month figure is traditionally the peak.