Zespri share buy-back in play

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Zespri’s steps to strengthen the company’s share allocation to better reflect growers’ production proportions have started to take effect.

In late October, Zespri closed off its targeted share offer and buy-back programme with 427 applications from growers to purchase more than 12 million shares valued at $95 million.

The share offer followed a number of changes to Zespri’s constitution, as approved through the long running Kiwifruit Industry Strategy Project. KISP was supported by two thirds of growers two years ago to improve the alignment between total production and grower shareholding.

The capital Zespri raises through the exercise then allows the marketer to fund a buy-back programme from eligible shareholders.

These are shareholders who no longer grow kiwifruit, or shareholders who are “over shared” – holding greater than 1.5 shares per tray of production.

This aspect of the programme has had 257 applications for almost nine million shares, valued at $70 million. It will result in the number of former growers still holding Zespri shares dropping by 30 percent.

Retiring Zespri chairman Peter McBride said the KISP review had been one of the key initiatives under his chairmanship, and the share realignment was a vital part to better allocate grower control at Zespri.

“There was a view early on that it could not be done, and that Zespri might lose some of its status as a single desk seller with regulatory change, but that has not been the case.”

He labelled the buy-back a milestone, particularly given more than 18 million shares valued at about $140 million were held by people who had left the industry.

“Through this share offer, a good number of growers have taken up the opportunity to either become shareholders in Zespri or to increase their shareholdings in line with their entitlements.”

The buy-back option gave eligible shareholders an effective option to sell shares without broker fees, with take up of the offer and buy back being voluntary. Shares were valued at $8 each.

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