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Wednesday 15th July 2009 |
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Seeka Kiwifruit Industries, which handles around 26% of New Zealand's kiwifruit crop, will write off its investment in Vital Foods this year. The company's shares jumped 13% on the announcement.
The write-down will impair the kiwifruit grower's earnings some $1.79 million for the year ended March 31, 2010, but won't impact on the company's cash flow as it doesn't contribute to the operating earnings.
The shares, which trade infrequently, climbed to $2.60 from $2.30 when they last traded on May 27.
Vital Foods, which manufactures the Kiwi Crush health drink, proposed a capital raising that would cut the value of Seeka's holding to an extent that the board considered "a full write off of the investment is appropriate," it said in a statement.
Seeka said it hadn't participated in any previous undertakings by Vital to raise cash.
The company posted a 54% increase in profit to $3.98 in the year ended March 31, including a one-off gain of $997,000 from the sale of its Berry packhouse.
Businesswire.co.nz
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