KEY POINTS:
NZ Farming Systems Uruguay could eventually raise twice its minimum target and be the 40th largest company on the Stock Exchange when it lists next week, says director Craig Norgate.
The company wanted to raise a minimum of $50 million by issuing shares at $1.50 each to expand its dairy farming operations in Uruguay.
However, Norgate, who is also chairman of 10.6 per cent shareholder PGG Wrightson, said oversubscriptions could see the final count between $80 million and $100 million.
The company was created by PGG Wrightson and has so far raised $169.6 million from issuing shares at $1 each since an initial public offer last December. PGG Wrightson had not originally planned to invest more money but would now take up its full entitlement of $13 million, Norgate said.
The closing date for a placement to eligible investors and a rights issue was Friday, while an institutional placement had already closed.
The company would list on the NZX next Tuesday and could be about the 40th largest company on the market, Norgate said. "It's not a bad story from zero to that in 12 months."
Revenue for the year ending June 30 was US$669,000 ($855,000), with the company making a net loss of US$289,000. "Given that we start up this year we don't expect to make a whole bunch of profit, if anything, this year but we would expect to be making a profit the following year," he said.
NZ Farming Systems had bought 30,980ha of land, comprising 20 farms, and could expand to 50,000ha at the current price of land.
Current land holdings would be fully productive by 2012, by which time the company expected to produce a fifth of Uruguay's current milk supply, with more than 50,000 milking cows.
"A year ago we were concerned about our ability to buy these farms and develop them to a New Zealand standard," Norgate said.
"We've been able to do them to a better standard than what we can in New Zealand and quicker."
