Craig Norgate. Photo / Richard Robinson

Craig Norgate. Photo / Richard Robinson

Craig Norgate - the man who brought PGG Wrightson together as a business - will no longer own a controlling stake and may lose his seat on the board after a $249 million capital injection plan is completed.

New Zealand's largest rural supplier revealed details of its long-awaited capital raising and rights issue yesterday as well as a clearer picture of the future ownership of the company.

Nearly half the new money it is raising will come from the coffers of Chinese agricultural company Agria, which will end up as the largest shareholder of PGW once the deal is complete.

Last month Agria committed itself to buying a 12 per cent stake in PGW as part of a placement offer valued at $36.2 million.

PGW chairman Keith Smith said all conditions of that offer had now been met including approval from the Government's Overseas Investment Office.

Agria yesterday said it intended to take up its full allocation of shares in the $180.7 million rights offer worth $20.8 million as well as buying more than half of the rights allocated to Rural Portfolio Investments (RPI) - the investment company of Norgate and the McConnon family.

Agria will pay RPI $25.6 million for the rights, boosting its share in the business to 19 per cent, while RPI's stake will plummet from 27.5 per cent to 12.4 per cent.

Agria has also committed itself to a further injection of US$25 million ($32.5 million) in the form of convertible redeemable notes paying 8 per cent interest which will be used to increase the equity in PGW's finance business in preparation for meeting new finance company regulations.

Chairman Keith Smith said the company would complete a review of its governance once the capital raising was completed but the new board would consist of eight non-executive directors and managing director Tim Miles.

Agria would have two seats on the board while Pyne Gould Corporation, which yesterday said it would take up its full share of the rights for $33.1 million, would also have two.

PGC will have its stake reduced from 20.7 per cent to 18.3 per cent under the deal.

Smith said three of the eight directors would be independent, including the chairman's role which he has already indicated he would like to step down from.

But exactly who will fill the remaining seat is still to be determined. Both Norgate and Baird McConnon are currently directors.

Smith said any board changes would not take place until February next year and would be phased in to ensure continuity within the business.