Shareholders to vote on capital raise

Opotiki Packing and Coolstorage (Opac) will use capital raised to increase processing capabilities, says chief executive Ian Coventry, which includes this new grader being built by Compac.

Kiwifruit post-harvest company Opotiki Packing and Coolstorage (Opac) will put agreements for an over-subscribed equity capital raise totalling $4.85 million to shareholders for approval this Friday, says chief executive Ian Coventry.

In addition to strong participation from existing shareholders and suppliers, the capital raise is significant for Opac in introducing two new strategic stakeholders. Bay of Plenty Regional Council investment vehicle Quayside Holdings and Te Tumu Paeroa, the office of the Maori trustee, will each take a 10.1 per cent equity stake in Opac.

"Their interest in investment in Opac is a significant vote of confidence in Opac and the kiwifruit industry," said Mr Coventry.

The new stakeholders effectively replace former cornerstone investor Seeka Kiwifruit Industries, which sold its 20per cent stake in Opac back to the company last year for $3.2million.

Seeka had been a shareholder since 2005, but decided last year that its strategic and operational objectives were no longer aligned with Opac's.

Quayside Holdings' major investment asset is the council's majority stake in Port of Tauranga. Quayside has existing kiwifruit holdings of around 34ha managed by Seeka in the Rangiuru Business Park area. Te Tumu Paeroa manages significant Maori land holdings throughout New Zealand, including in the Eastern Bay of Plenty where Opac has long-term relationships with Maori growers.

"The investment also signals confidence in the prospects of both Opotiki and the Eastern Bay of Plenty as an area for horticulture, business development and employment growth," said Mr Coventry.

The rationale for the capital raise was the significant growth coming from its existing client base, he said.

"Our growers have always been reasonably heavily invested in Gold kiwifruit and with the conversion to SunGold (G3) post Psa, we're starting to see those crops hit full production. We need to match our processing capacity with the volumes that are coming out of the orchards."

During Psa, Opac allowed the lease on a processing facility in Gisborne to expire and has now consolidated its operations in Opotiki.

The capital raise will support an investment programme begun earlier this year to install a new packing line and cool storage facilities at the site.

Quayside Holdings chief executive Scott Hamilton said the investment company saw kiwifruit as a significant part of the local economy.

"This is a good opportunity to invest into that part of the value chain," he said.

It also allowed Quayside to invest into a part of the Bay which the Regional Growth Study had identified as having the potential for significant growth.

"We see this as a great opportunity."

Opac was advised on the transaction by James Beale of Beale Capital Consultants.

Opotiki Packing and Coolstorage (Opac)

* A kiwifruit post-harvest and orcharding business.

* Provides services to 700 canopy hectares of kiwifruit orchards.

* Processed more than 5.5million trays in 2015.