PGG eyes $100m Uruguay venture

Rural services company PGG Wrightson is considering plans to publicly float a new company, raising more than $100 million to purchase and develop farms in Uruguay.

In a short statement to the NZX last night PGG Wrightson said the public offering would be for ordinary shares in a company called NZ Farming Systems Uruguay (NZFSU).

The company would be "based on the application of New Zealand farming systems to pastoral agriculture in Uruguay".

The size of the offer is expected to be in excess of $100 million and the net proceeds would be used to buy and develop farms in Uruguay using intensive pasture based farm management systems developed in New Zealand.

The board emphasised that no firm decision had been taken on the offer.

"No money is currently being sought and no applications for shares in NZFSU will be accepted, or money received, until any potential investor has received an investment statement."

The proposal is subject to final due diligence, which is likely to take several weeks. But it is anticipated that the offer, if approved, would open on November 6, 2006.

Details would be released when the offer was confirmed and until then the company would make no further comment, the statement said.

PGG Wrightson already has a subsidiary in Uruguay. Called Wrightson PAS, it is a high-tech company, specialising in the production and sale of forage seeds. It also has three Australian based subsidiaries.

PGG Wrightson delivered below forecast profit of $27 million for the year to June 30.

The result was affected by less than favourable conditions in the New Zealand rural sector.