SCF receivers sell Scales stake for $44m

Kerryn Downey. Photo / Steven McNicholl

The receivers of South Canterbury Finance have secured a conditional deal to sell the company's 79.7 per cent stake in horticulture business Scales Corporation for $44 million.

Receivers Kerryn Downey and William Black of McGrathNicol announced they had secured a conditional agreement with New Zealand investment firm Direct Capital for the sale of Scales. The sale price of $2 per share, of a 79.7 per cent stake, works out at about $44 million for SCF's shareholding.

McGrathNicol said the sale was subject to a number of conditions and was expected to be completed in a few months.

Scales will hold a meeting with shareholders to allow them to vote on the transaction, which needs to pass by simple majority. A report will also be produced on the fairness of the transaction. Downey said nothing was required of shareholders and that Scales would provide further information. The deal was an excellent result, and the culmination of hard work between McGrathNicol and its advisers.

The receivers have been working on this deal since the "tail end of last year" and it has gone smoothly.

The receivers received interest from around Australasia and the world for SCF's stake in the Scales businesses and had worked closely with Goldman Sachs who lead the deal.

"It [the deal] will provide increased certainty to all of Scales Group's stakeholders, customers, suppliers and minority shareholders. It's very pleasing to have found credible New Zealand buyers for this leading multi-industry business," Downey said.

Scales chief executive Andy Borland said the deal would provide certainty for Scales and help it move forward with its plans to develop and grow the company.

Scales is a horticulture and primary sector processing, exporter and logistics business. It operates businesses including Mr Apple - the largest grower, packer and exporter of apples in New Zealand - Meateor Foods, exporting processed meat used in leading pet food brands, New Zealand's largest cold store network, a bulk liquids storage business and a logistics business.

Last month, the Business Herald reported that the receivers had already paid the Crown $175 million back for the Government's $1.6 billion bailout of SCF investors last year.