Listed animal and farm improvement co-operative LIC is planning to boost its share value with increased market trading.
Currently farmers have to buy a minimum of two and a maximum of 30 NZX-listed investment shares for each co-operative control share they own, which is purchased based on theusage of LIC products. Under the proposed new rules farmers would be able to own as few or as many investment shares as they wanted - up to 5 per cent of all stock.
LIC's 1500 employees would also be able to invest in the company through a Staff Share Unit Trust, which could hold a maximum of 5 per cent.
Chairman Stuart Bay said the investment shares, which last traded at $1.95, were undervalued.
"The brokers who we talk to suggest that they would be at least the $5 mark if they were openly traded," Bay said. The undervalued shares would limit the company's ability to raise additional capital in the future.
LIC, formerly Livestock Improvement, was not proposing open trading and understood there would therefore be a discount.
A roadshow was planned for the last week of April and the first week of May, after which a shareholder vote would be taken, needing 75 per cent approval.
