Deal to buy VGL approved by NZRL

The New Zealand Rural Land Company’s deal to buy the high-profile Van Leeuwen Group has been approved.

At a meeting this week NZRL’s shareholders voted on the $122million deal.

A purchase of that scale must been approved by the company’s shareholders according to the Companies Act and NZX rules.

NZRL director Christopher Swasbrook said 100% of the shareholders present at the meeting agreed to the deal.

Fifteen of VGL’s dairy farms in South Canterbury and North Otago would be sold to NZRL and leased back to three of VGL’s owned companies.

The lease terms were for 11 years.

NZRL would fund the purchase with $70million in cash and the balance with new debt from Rabobank.

The transactions would increase NZRL’s internal debt to about 40% of total assets from its declared policy of 30%, something the company has said it is comfortable to do.

NZRL also announced this week a $44.3million rights offer to pay down debt and finance more land acquisitions.

Under the offer, shareholders could buy two shares for every three they own at $1.10 a share.

The price represents an 8% discount to the 10-day volume-weighted average price of $1.20.

VGL was placed into receivership last month under the terms of a general security agreement with an Australian-based fund manager Merrick Capital.

Auckland based Calibre Partners were appointed receivers.

According to the companies office website yesterday VGL and its subsidiaries were still in receivership.

Settlement date for the purchase will be next Tuesday.

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