27 Apr 2009

Higher interest bill for PGG Wrightson

12:23 pm on 27 April 2009

PGG Wrightson says the additional funding it's secured to compensate Silver Fern Farms for the collapse of their proposed partnership, will increase its interest bill by $2.5 million this year.

PGG Wrightson last week agreed to pay Silver Fern $25 million dollars, on top of the $5 million it's already paid, as well as 10 million shares in the company, following its failure to complete the $220 million deal.

It's raised the $25 million of subordinated debt from South Canterbury Finance, and $10 million of that can be converted within 90 days to shares in PGG Wrightson.

The company says its interest expense on the loan will be less in future years as it benefits from recent falls in interest rates.