PGG Wrightson Finance has adjourned a bondholder meeting called to vote on extending the expiry date of NZ$100 million worth of bonds after failing to attract enough investors, either to the meeting in person or by proxy, to establish a quorum.
(Updates add total number of bondholders, and comments from Mark Darrow including that several hundred proxies were received).
The meeting, in Christchurch today, has now been adjourned and rescheduled for August 12.
Mark Darrow, PGG Wrightson Finance's CEO, said in a statement it was always going to be a challenge getting a quorum given the "high" 50.1% requirement and fact that bondholders were widely spread both around New Zealand and overseas.
Darrow told interest.co.nz there were nearly 1,700 bondholders in total and the quorum needed was 50.1% of the bonds by value. This had been "narrowly" missed. The "several hundred" proxies submitted for today's abandoned meeting would be carried over to the second meeting so PGG Wrightson Finance was confident of having enough bondholder support for that meeting to go ahead. About 30 investors turned up to today's meeting at the Copthorne Hotel Commodore.
The bond rollover proposal is part of a NZ$412.2 million wall of funding maturities PGG Wrightson Finance faces in a 12 month period across its debenture, bank and bond funding. All up, about 86% of the rural lender's total financial liabilities are due to mature in the year to March 2011 including NZ$178.8 million worth of debentures.
Darrow told interest.co.nz earlier this month the volume of debentures up for renewal within 12 months was nothing new, the relationship with its banks was very good, and he expected bondholders to support a one year maturity extension given the Crown guarantee and good - 8.25% per annum - interest payments.
"We don't see why everyone wouldn't support it (the bond rollover)," Darrow said then.
PGG Wrightson Finance called the meeting to seek investor approval for a proposal to amend its Bond Trust Deed and the conditions attached to the NZX listed bonds.
The original conditions of the bonds permitted PGG Wrightson Finance to extend their term by up to 12 months from their scheduled October 8, 2010 maturity date, if the Crown guarantee which PGG Wrightson Finance held was extended on similar terms. The company has been accepted into the extended Crown retail deposit guarantee scheme and granted an extended Crown guarantee.
However, as the extended Crown retail deposit guarantee scheme is on different terms, so extending the bond maturity date until October 8, 2011 needs bondholder approval. The extended Crown guarantee kicks in from October 12, when the initial guarantee expires, running through until December 31, 2011.
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