Silver Fern Farms has formally put an end to the $220 million deal with PGG Wrightson after PGW defaulted on its agreement to take a 50% stake in SFF.
Although Silver Fern has axed the deal, the cooperative said it had not yet decided what compensation it will seek for Wrightson’s failure to pay the first instalment of $145 million.
It simply said that Silver Fern’s default on October 1 “has left Silver Fern Farms with no alternative but to terminate the agreement relating to the proposal”.
This followed “continuous discussions” and the inability by Wrightson to deliver any level of certainty as to a possible settlement date over an adequate period of time.
“Termination of the agreement was a necessary step to provide certainty to our shareholders and other stakeholders,” said Silver Fern chief executive Keith Cooper.
“We have not determined the amount or form of compensation we will seek to recover,” he said.
“If any alternative arrangement is agreed and implemented, then this issue will be addressed as part of those arrangements.”
SFF has the right to seek compensation but they will be mindful that if they do they may jeopardise their relationship with PGW and they won’t want to do that if they want PGW stock agents to procure stock for them.