By LIBBY MIDDLEBROOK
Kiwi Co-operative Dairies has issued $75 million in floating rate notes to pay for the purchase of Northland Co-operative Dairies.
The Taranaki milk processor - which is planning a takeover of Northland before June 1, 2000 - is raising cash to even out the difference in value between
the two companies.
New Zealand's second largest dairy company, Kiwi is giving its farmer shareholders a tax-free bonus issue equal to $112.5 million and it is planning to pay its 4400 suppliers an average of $12,000 by buying back shares, at a total cost of $50 million, if they approve the takeover next month.
Kiwi treasurer Craig Stephen said the company was offering a 90-day bank interest rate to investors which would be topped up by a "small margin".
He said the company had reduced the rate of return after expressions of interest in the floating rate notes exceeded $100 million.
"We might use the proceeds to refinance bank debt which is of higher cost," he said.
Westpac Institutional Bank is acting on behalf of Kiwi. The floating rate notes issue is Kiwi's second in the New Zealand market and follows an issue of $125 million Eurobond in February this year.
