Kain quits as Apple Fields goes mining

By Chris Hutching

Friday 7th September 2001

TOM KAIN: Resigned

Apple Fields managing director Tom Kain stepped down yesterday as part of the complex machinations behind the company's evolution into a Nevada ore refiner.

The former orchardist has signed initial contracts to split the company, with the public listed entity buying ore and refining assets in Nevada while the subsidiary companies, which hold three property joint ventures, going to a new company to be operated by Mr Kain.

A conditional agreement has been signed with SABC management Project of Adelaide and Titan Resources of Delaware for the purchase of ore concentrates at Wellington, Nevada.

The deal is conditional on further evaluation of the potential of the ore.

The move is apt given that Apple Fields itself has been "mined" over the past couple of years in a managed property selldown to eliminate $70 million of debt. The treatment of the remaining three property joint ventures around Christchurch might also be likened to a final "refining" process. The three properties were sold to other parties but Apple Fields has agreements where it will benefit from any profit arising from rezoning efforts by Mr Kain and the couple of executives who remain employed by the company.

Meanwhile, Mr Kain and his brother Charles have "sold" their voting rights to 19% of their 47%of the company's shares and will later transfer another portion of 900,000 shares. The aim is maximise tax losses of up to $45 million available to the company against future trading profits. About half the tax losses will go to the refining entity if it can remain with the continuity of shareholder rules required by Inland Revenue.

To maintain continuity, a new holding company is set up between Apple Fields and its property subsidiaries. Apple Fields then issues shares on a 1:1 basis and uses them as consideration to buy the new holding company

The ore deal will be funded by an issue of 200 million shares at 50c each to Titan for the mine ore concentrates and further shares progressively at $1 for the increased value the refining process creates in excess of $NZ100 million. Total consideration for the deal is expected to be about $US110 million.

The arrangements are subject to shareholders' approval and a period of about four months of due diligence.

After the resignation of Mr Kain, Apple Fields has appointed two nominees of SABC, Derrick Butler and Terrence Loveday, both of Adelaide, South Australia. The board now comprises the two SABC nominees, two independent directors, Geoffrey Cone and Gordon Stewart, with a further independent director yet to be named.

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