Dairy Equity Announcement - 12 September 2008
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Dairy Equity Limited (DEL) | 5:08 pm, Friday 12 September 2008 | DEL | 0.230 |
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(-4.17%) |
Media Release 12 September 2008
Dairy Equity Makes Further Progress on Asset Realisation
NZSX listed Dairy Equity Limited (DEL) today advised that it expects to have,
by the end of October, a further $3 million in cash and that this figure may
increase as a result of a pending initiative to sell its remaining SWAP
Agreements.
DEL Chairman, Peter Jensen, said that the $3 million the Company is expecting
to have available in late October is largely a result of acceptances it
received in respect of a recent repurchase offer DEL made to its farmer
counterparties. It also includes a $149,000 payment received from Fonterra
in relation to the redemption and re-issue of approximately 122,000
drought-affected shares.
"Five farmer counterparties took up the opportunity to terminate their DEL
SWAP Agreement by repurchasing the Fair Value Share beneficial ownership they
had earlier sold to DEL. As a result of these sales and permanent redemptions
to Fonterra, the number of Fair Value Shares beneficially owned by DEL has
reduced by just under 300,000 shares to around 1.9 million shares. We have
now sold 38% of the shares that we originally purchased from farmers"
Peter Jensen said that DEL is endeavouring to realise the value of the
balance of its investment in Fair Value Shares, by offering to sell its
interest in its remaining 15 SWAP Agreements to the wider investment
community.
"Fonterra is New Zealand's largest company and the largest supplier of dairy
ingredients in the world, but unless you supply the giant co-operative with
milk, you can't own its shares. We expect that DEL's SWAP Agreements will
appeal to investors wanting exposure to Fonterra's equity, and to Fonterra
suppliers who want to increase their investment in the Company above the
co-operative share standard.
We are in the process of writing to these parties offering them the
opportunity of purchasing one or more of our remaining SWAP Agreements at the
current Fonterra Fair Value Share price of $5.57 per share. We will advise
the market on the size, timing and nature of a further return of capital to
DEL shareholders as soon as this sales initiative is concluded in mid to late
October."
Ends.....
For Further Information
Peter Jensen
Chairman, Dairy Equity Limited (0274) 972 551
