Disappointed Norgate eyes greener pastures

Craig Norgate has been in agriculture for 25 years. Photo / Richard Robinson

Craig Norgate, the businessman instrumental in the creation of Fonterra and PGG Wrightson, may head offshore as his New Zealand investments are wound down.

Trading in redeemable preference shares (RPS) for his investment company Rural Portfolio Capital was suspended indefinitely yesterday after the company said it could not meet its trust deed obligations. The trustees last night called in receivers McGrathNicol to take control of its assets.

Norgate said he was very disappointed about the situation. The 1400 or so holders of the redeemable preference shares were largely mum and dad investors, though there were some institutional investors, he said.

He would not confirm speculation about his departure but said: "I do feel as though I've done everything I can to New Zealand agriculture. Even the areas that there might be unfinished business people know exactly what needs to be happening.

"It's 25 years I've been involved here now and I don't feel as though there's that much new I've got to offer. So you can take it from that that I will be considering other things."

He was on the boards of seven companies and had a daughter at school.

"So those are the priorities for me at the moment," Norgate said.

On Friday Rural Portfolio Capital said it was unable to find $1.45 million needed to top up the dividend escrow account for the RPS programme.

The $60 million worth of redeemable shares are due next year, with secured assets worth about $29.63 million - comprising shares in PGG Wrightson, New Zealand Farming Systems Uruguay and $742,314 in a dividend escrow account.

With the lack of any prospect of Rural Portfolio Capital, or RPS guarantor Rural Portfolio Investments, fully funding the escrow account in the required time, trustee Trustees Executors was entitled to take enforcement action against a security pool relating to the redeemable preference shares.

The company said it had proposed a course of action to the trustee's executors it believed would result in the security being able to be transferred to holders as quickly and cost effectively as possible.

"We've worked for 18 months to try to make sure we didn't have this sort of outcome," Norgate said.

"The trustee now decides what happens, it is out of our hands now. Hopefully he will deal with it quickly."

Market commentator Arthur Lim said Norgate had too much energy and experience not to resurface at some point. "I think it would be a hell of a pity for New Zealand as a country to not recognise that he has actually made a big contribution to rationalising the industry and bringing better efficiencies," Lim said.

At just 29 Norgate became chief executive of Kiwi Co-operative Dairies and through a series of acquisitions and mergers grew its revenue from $300 million to $4 billion.

He then played a key role in the mega-merger that formed Fonterra and was chief executive for two years.

After that he turned his attentions to the rural services sector, using Rural Portfolio Investments to drive the merger of the three biggest players, creating PGG Wrightson.

- additional reporting by NZPA