Seeka, having failed in merger, omits dividend, focuses on debt

Friday 23rd December 2011

Seeka Kiwifruit Industries, the grower which attempted to merge with rival Satara Cooperative this year, said it won’t pay a final dividend as it focuses on repaying debt.

The listed fruit grower and packer expects full year earnings before interest, tax, depreciation, amortisation, fair value adjustments and asset revaluations to be in the range of $20 million to $21 million, from $19.8 million in the nine months ended Dec. 31.

The company said it will focus on reduction in bank debt and as part of that strategy it won’t pay a December dividend. No dividends were declared at the end of the 2010 financial year either.

In November, 48 percent of shareholders in rival Satara voted against a proposed merger, which was seen as giving scale in an industry hurt by the vine-wasting disease PSA-V. The vote fell short of the 75 percent majority needed.

Satara advised the NZX in a statement it holds no assets for sale and has no intention to sell any assets at this point in time. It made the statement in response to what it said were issues raised at its recent shareholder meeting this month.

At the meeting shareholders were told directors are working to generate sufficient profits to reward all shareholders, sustain rebates, pay a dividend and have enough money left to re-invest in the business.

Shares in Satara have halved in value in the past five years to trade recently at 38 cents, while Seeka share are currently trading at 90 cents.

BusinessDesk.co.nz

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