Olam buys 10 mln Farming Systems shares from RPI receivers, lifting stake to 18.4%

Monday 17th May 2010

Olam International, the Singapore-based food commodities group, acquired 10 million shares in NZ Farming Systems Uruguay, lifting its stake to 18.4% and strengthening its portfolio of New Zealand dairy interests.

Olam paid 41 cents apiece for the shares from Kerryn Downey and Andrew Grenfell, the receivers of Rural Portfolio Investments. Last week they sold just over 6% of PGG Wrightson to recoup some of the $60 million owed to RPI’s preference share holders. Taken together with the sale of the Wrightson stake and some $742,314 in RPI’s dividend escrow account, the receivers will recoup about half the amount owed.

Olam acquired its initial 14% stake in Farming Systems last September, when it bought 35 million shares at 41 cents apiece from Australia’s Hunter Hall Investment Management. The shares jumped 5% to 41 cents on the NZX today.

Separately today, Farming Systems reiterated its target for a full-year loss, saying higher prices will make up for milk production that will undershoot its forecast.

The company that’s managed and part-owned by PGG Wrightson Ltd. expects to report an EBIT loss of not more than US$10 million, even though milk production will be 10% to 15% short of 80 million litres, which was the bottom of its forecast range.

The Singaporean group acquired 25% of Dairy Trust, the owner of cheese maker Open Country Cheese, in 2008. Olam operates an integrated supply chain for 17 agricultural products and food ingredients in 60 countries.

Temasek Holdings, which has a holding in GuocoLeisure, the company once known as Brierley Investments, owns about 14% of Olam. Kewalram Chanrai Group owns 36.7% and managers of Olam hold about 16%.

Businesswire.co.nz

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