KEY POINTS:
A plan to raise money to buy more farms in South America farms has been put on hold due to turmoil in world financial markets, says NZ Farming Systems Uruguay.
The company was set up by PGG Wrightson to develop dairy farms in the South American country and floated on the NZX in December.
It has previously advised the market of an intention to raise further capital to buy additional land in Uruguay and possibly Brazil while the economics of doing so remain compelling.
"Current market conditions, including turmoil in world financial markets and the NZFSU share price, do not support an expansionary capital raising. We have therefore decided to postpone capital raising until conditions are more favourable" company chairman, Keith Smith said today.
A further capital raising is not required to complete the dairy conversion and development of the 36,300 hectares we currently own.
Land and livestock were valued at US$206 million at 30 June 2008 and with no net debt the company has the ability to secure debt funding to cover its needs.
Smith said he would make further comment on the company's programme at the annual shareholders' meeting, being held this Thursday, October 16.
A capital raising by PGG Wrightson earlier this month missed its target with the listed rural services company caught in the eye of an international financial storm, said its chairman Craig Norgate.
PGG Wrightson was looking to raise around $100 million towards the $220 million cost of buying half of meat processor co-operative Silver Fern Farms.
Rural Portfolio Investments - a Norgate joint venture with Otago's McConnon family - and interests associated with Murray Flett bought back 14 million NZ Farming Systems Uruguay shares sold to PGG Wrightson.
