By PHILIPPA STEVENSON agricultural editor
Graeme Hart is looking to recoup the cost of buying farmer shareholders out of dairy marketer New Zealand Dairy Foods with a $150 million capital notes offer.
Hart's Dairy Foods Holdings, formerly Hollingbourne Holdings, paid $245 million, or $1.75 a share, for the company in May. He
initially got a deal for Fonterra's half of the local market company, which it was required to sell under legislation allowing formation of the near-monopoly.
Hart, New Zealand's richest man, then went aggressively after the half of the company held by around 6200 North Island dairy farmers.
One farmer, George Moss, who chairs the farmer-backed Great Milk Company which failed in its bid for Dairy Foods, said yesterday it was unlikely farmers would want to get back in.
"The smart thing would have been to leave farmers in there," he said. "Equity is easier on cashflow than debt would be."
Dairy Foods Holdings said yesterday it would launch a bid for up to $150 million of capital notes to New Zealand investors later this month. The funds would be used to repay borrowings run up in the takeover of the milk marketer.
The unsecured, five-year and 10-year notes will have a fixed rate to be set at the launch.
Organising broker First NZ Capital Equities will underwrite the issue up to $100 million.
