Tasman Farms to delist from Unlisted, taps major shareholder for funds

Thursday 27th May 2010

Tasman Farms, which operates dairy, beef and sheep farms in Tasmania, will delist from the Unlisted platform as a condition of a cash injection from its majority shareholder, the New Plymouth District Council.

The farming operator wants to raise A$10 million through a one-for-eight share issue to existing investors and a convertible debt facility provided by the council. As a condition of the facility, it will have to exit from the Unlisted platform.

The high cost of keeping its listing and servicing small shareholders were the reasons behind its decision to delist, it said. The shares last traded at 75 cents, and have slumped 25% this year.

The council, which owns some 72% of the farming operator through its investment arm, will underwrite a one-for-eight share issue to existing investors at a price of 75 cents a share up to $6.5 million, and will subscribe to A$5 million worth of convertible notes.

The farming operator plans to use the proceeds of its rights issue to boost cash flow and improve its existing farming operations.

Tasman Farms will hold a special meeting before its deadline to delist on September 14, where it will put forward a proposal to investors to increase the minimum shareholding in the company to 1,000 shares. If the resolution passes, the company will enforce it by buying back or requiring the transfer of investments below the new minimum level.

Taranaki Investment Management Limited, the council’s investment arm, said its holding in Tasman Farms gave it upside exposure to emerging economies in Asia. Its head, Michael Trousselot stepped down from Tasman Farms’ board yesterday.

Tasman Farms made a net loss of $766,000 in the six months ended November 30 last year, compared to an $824,000 profit a year earlier.

Businesswire.co.nz

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