Cornerstone shareholder Rural Portfolio Investments, yesterday boosted by $27 million its cash reserves by selling one of its two share tranches in rural servicing company PGG Wrightson.
The third largest shareholder in PGG Wrightson with just over 12%, it sold 48.4 million shares held by Rural Portfolio Investment Securities for 56c each.
Sold through Forsyth Barr, 33.5 million shares were taken up by institutions and the rest placed by Forsyth Barr brokers.
The sale of 6.39% of PGG Wrightson's share script, followed news this week that Rural Portfolio Investments (RPI) breached the terms of its Security Trust Deed after making its six-monthly dividend payment, a move the company said would be remedied within the allowed 30-day period.
Under the deed, the company must retain sufficient funds to meet its next dividend payment.
In December, RPI took up its full rights issue entitlement in PGG Wrightson (PGGW), buying 8.4 million more shares.
RPI, the investment vehicle of Craig Norgate and with substantial shareholding by the McConnon family of Dunedin, recently sought an extension of time from lending institutions to allow arrangements to settle outstanding debts.
The sale immediately had a positive impact on the PGGW share price which rose by as much as 3c during the day, having opened at 56c.
This leaves RPI with 6.17% of PGGW through Rural Portfolio Investments Ltd, still the company's third largest shareholder behind Pyne Gould Corporation and Agria (Singapore).
Forsyth Barr investment adviser Peter Young said the possibility of RPI selling shares had clouded the stock for some time, so the market would welcome this action.
The share broker has revised its valuation from 79c to 82c and reiterated its investment recommendation to accumulate.
