PGG Wrightson shareholders have blasted the company's board for losing nearly $50 million on the failed Silver Ferns Farm deal and called for its directors to resign reports The NZ Herald. The board of NZ's largest rural supplier fronted up at its annual meeting in Auckland yesterday to face more than a hundred investors who were furious about the company's performance. PGW reported an after-tax loss of $66.4 million compared with a profit of $73.2 million for the June year after it had to write off $49.6 million for settlement and due diligence costs associated with its failed deal to buy a 50 per cent stake in meat processor Silver Fern Farms. The deal fell over last year after PGW failed to get finance and then had to pay a $42 million compensation package to Silver Fern because the deal was unconditional. Yesterday PGW chairman Keith Smith said it was a disappointment but the settlement had allowed the company to put the deal behind it. But the board took full responsibility for the failure. Smith said the company had had the backing of its bankers to get the deal done but it was conditional on raising an additional $110 million in equity. But a week after the vote by Silver Fern had been completed Lehman Brothers collapsed and the capital markets closed, allowing the banks to pull out of the deal. "We had been working on the equity raising for some time, and there was every reason to be confident this would be completed. In the end, we were undone by the worst financial crisis in 80 years."
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