Pyne Gould Corp plans to continue as a wealth management firm after distributing shares in its merged Marac Finance unit and repaying debt from the sale of its holding in PGG Wrightson.
The listed company, which spun off Marac into Building Society Holdings, will have two business units – Perpetual Group, which has about $587 million in funds, and Torchlight Group, an asset management firm established by director George Kerr.
PGC will appoint Bryan Mogridge as chairman once shares in BSH are distributed to shareholders and the Wrightson stake is sold, the company said in a statement today. He replaces Bruce Irvine.
Jeff Greenslade will resign as chief executive to focus on his role as managing director of BSH.
That will leave the board as Mogridge, Kerr and John Duncan, with one independent director to be appointed.
The plans are contingent on the outcome of the takeover of Wrightson because PGC has a lock-up agreement for its 18.3 per cent holding with Agria and New Hope Group of China, should their partial takeover succeed.
A potential new bidder for Wrightson, thought to be Canada’s Agrium, is undertaking due diligence.
PGC “has committed to sell its shares to Agria, should Agria’s offer become unconditional,” it said today.
“PGC is not in a position to comment on the likelihood of any competing offer eventuating or becoming unconditional.”
Assuming Agria and New Hope succeed, PGC will use the proceeds of the sale of Wrightson shares to repay about $27 million of loan notes and provide about $5 million of working capital.
PGC had previously intended to fund the repayment through the placement of some of its BSH stock but will now distribute all of those shares to its shareholders.
PGC also said it may use any leftover cash could also be used to provide equity finance to BSH for acquisitions, which could be via subscribing to more shares in BSH, it said.
PGC’s 18.3 per cent stake in Wrightson is worth about $82 million, based on Wrightson’s stock price yesterday of 59 cents, suggesting it could have a spare $50 million up its sleeve for further investment in BSH.
Its 72.2 per cent holding in BSH is worth $158 million at yesterday’s share price of 73 cents.
– BusinessDesk
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