Pgg Wrightson Limited · NZX:PGW
Pgg Wrightson — Investor Presentation (November 2009)
39 slides from Pgg Wrightson's investor presentation, Nov 20, 2009
Slide 1: PGG Wrightson Capital Raising Investor Presentation
PGG Wrightson Capital Raising Investor Presentation November 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 2: Disclaimer
Disclaimer This Investor Presentation contains not only a review of operations, but also certain forward looking statements (including forecasts and projections) about PGG Wrightson Limited (PGW) and the environment in which PGW operates. Such statements are necessarily based on a number of assumpti
Slide 3: Introduction
Introduction NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 4: $249.4 million to recapitalise PGW
$249.4 million to recapitalise PGW PGG Wrightson (PGW or the Company) to raise $249.4 million of new capital (before raising fees and costs) to repay debt and increase equity investment in PGG Wrightson Finance (PGWF) 1) $36.2 million placement of ordinary shares to Agria Corporation (Agria) at $0.8
Slide 5: Investment highlights
Investment highlights Diversified Agribusiness with Leading Market Positions Long-standing position in New Zealand agriculture through its reputation and network, extensive product and service offering, and advice based service model Comprehensive agribusiness footprint, with approximately 55,000 ac
Slide 6: Investment highlights (continued)
Investment highlights (continued) Growing International Presence A market leader in Australian temperate forage seeds, and targeting further opportunities South American expansion, particularly in Uruguay, where it is a leading supplier of forage seed and provides farm management services along with
Slide 7: Equity Raising overview
Equity Raising overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 8: Overview of equity raising
Overview of equity raising Total equity raising of NZ$249.4 million comprising; Sources (NZ$m) 1) Placement to Agria of 41.1 million ordinary shares at NZ$0.88 Placement to Agria 36.2 per share to raise NZ$36.2 million Rights issue 180.7 – Placement price at 39.5%1 premium to 5 day VWAP CRNs 32.5 pr
Slide 9: Placement to Agria
Placement to Agria Initial placement of new shares to Agria at 39.5% premium to 5 day VWAP of PGW’s share price prior to entering trading halt on 16 October 2009 Placement to Agria Corporation Placement size 13.0% of existing PGW shares on issue New shares issued 41,100,000 Placement price $0.88 per
Slide 10: Rights issue to raise $180.7 million
Rights issue to raise $180.7 million Rights issue entitling subscription for 9 new shares for every 8 shares held at $0.45 per new share Entitlement ratio 9 for 8 Maximum new shares to be issued 401,530,068 Issue price $0.45 Discount to TERP1 17.3% Total equity raised $180.7 million Ranking Equally
Slide 11: Issue of CRNs to Agria
Issue of CRNs to Agria Agria will invest US$25 million (assumed in the PFI to be NZ$32.5 million) in CRNs in PGW, with the proceeds to be invested in PGWF Terms of CRNs provide PGW with considerable flexibility going forward – PGW can either leave CRNs in place as a perpetual note, or US$25m choose
Slide 12: Issue of CRNs to Agria (continued)
Issue of CRNs to Agria (continued) If CRNs are redeemed by PGW: – Agria can choose to receive cash (equal to face value plus redemption premium), or exchange into PGWF shares subject to a PGW shareholder vote – exchange ratio is based on “book value” of PGWF equity and is subject to a cap and collar
Slide 13: Equity raising timetable
Equity raising timetable Announcement of Equity Raising 20 November 2009 Settlement and Allotment of the Agria Placement 23 November 2009 Record Date for determining entitlements (5.00pm New Zealand time) 26 November 2009 Existing Shares quoted ex-entitlement on NZSX 27 November 2009 Rights trading
Slide 14: Capital Structure review
Capital Structure review NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 15: Debt maturity profile (excluding PGWF)
Debt maturity profile (excluding PGWF) PGW’s banking syndicate of ANZ, BNZ and Westpac remain supportive of the Company Post repayment of Amortising Term Facility, no term debt maturing before August 2012 Amount outstanding Debt facilities (NZ$m) Facility limit 31 October 09 30 June 101 Current matu
Slide 16: Revised Charging Group bank debt covenants
Revised Charging Group bank debt covenants Covenant limit Type of covenant Description ♦ 30 Jun 2010: < 4.00x ♦ Senior Debt to Charging Group EBITDA for Senior Debt Coverage Ratio ♦ 30 Sep 2010: < 3.50x the last 12 months ♦ 31 Dec 2010: < 3.00x ♦ 31 Mar 2010: ≥1.50x ♦ Charging Group EBITDA plus leas
Slide 17: Forecast Group (ex PGWF) debt reduction
$277 million Forecast Group (ex PGWF) debt reduction 450 412.8 400 350 Total facilities (senior and junior) 300 $297.9 million post equity raising NZ$ millions 250 200 (207.0) 8.2 14.3 32.5 135.4 150 (44.9) (20.0) (23.0) (5.0) 100 (32.5) 50 0 FY09 Net Net Cash from Receipt of Brazil Farm Other Capit
Slide 18: Group (ex PGWF) debt reduction initiatives
Group (ex PGWF) debt reduction initiatives Cash from Operations $45 million cash from operating activities forecast in FY2010 Receipt of NZFSU Receivable $23 million receivable (principal plus accrued interest) from NZFSU is due on 31 March 2010 – NZFSU has confirmed that it remains on track to pay
Slide 19: Forecast Group (ex PGWF) credit profile
Forecast Group (ex PGWF) credit profile Equity raising will significantly improve PGW’s credit Senior Debt Coverage Ratio (x) metrics as well as allowing full repayment of the 5.0 $200m Amortising Term Facility < 4.0x 4.0 2.8x 3.0 2.0x 2.0 1.0 0.0 June 2010 Covenant June 2010 Forecast June 2010 Fore
Slide 20: Forecast PGWF credit profile
Forecast PGWF credit profile Capital injection from the NZ$ equivalent of US$25 million (assumed in the PFI to be NZ$32.5 million) issue of CRNs by PGW to Agria $841 million reduction in loan book through divestment of loans and a managed reduction to reduce concentration risk – potential loan sale
Slide 21: Operating performance and PFI
Operating performance and PFI NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 22: Strategic initiatives
Strategic initiatives Enhance customer interface and experience Restructure the service delivery model to an enhanced advice-based service model Increase customer loyalty and cross-selling activity by integrating new Customer Relationship Management technology Focus on domestic businesses with growt
Slide 23: FY2010 trading update (to 31 October 2009)
FY2010 trading update (to 31 October 2009) The Winter trading period is typically the slowest period for PGW especially across three of the major business units: Seeds, Rural Supplies and Livestock Year to date PGW (excluding PGWF) revenue of $365.8 million and EBITDA of $11.3 million over the first
Slide 24: FY2010 PFI income statement
FY2010 PFI income statement Year ending 30 June ($m) 2010F 2009A Operating EBITDA of $73.4 million is forecast for FY2010 representing a 9% decrease from Operating revenue 1,108 1,281 FY2009 Cost of sales (819.0) (977.2) Gross profit 288.8 303.4 Higher financing costs are forecast due to higher inte
Slide 25: FY2010 PFI EBITDA breakdown
FY2010 PFI EBITDA breakdown Year ending 30 June ($ 000) 2010F 2009A Revenue decline in Rural Supplies is partially Customer Services offset against higher gross margins due to a Rural Supplies 12,503 16,196 reduction in low margin fertiliser and stockfood Fruitfed Supplies 10,222 9,873 sales and cos
Slide 26: Forecast Group FY2009-10 EBITDA bridge
Forecast Group FY2009-10 EBITDA bridge 80.0 78.0 76.7 76.0 0.5 4.0 74.0 0.6 73.4 0.3 NZ$ million 1.8 (3.7) 72.0 2.0 (0.2) (2.6) 70.0 (5.5) (0.5) 68.0 66.0 FY2009 Rural Fruitfed Livestock Customer Seed and Agri-feeds PGWF Real Estate South Corporate Other FY2010 EBITDA Supplies Supplies Services Grai
Slide 27: FY2010 PFI balance sheet
FY2010 PFI balance sheet Year ending 30 June ($m) 2010F 2009A Current Assets Reduction in working capital from new Cash and equivalents 54.1 46.0 management initiatives Trade and other receivables 177.1 192.7 Finance receivables 347.2 407.9 Post equity raising, net debt positions of both Inventories
Slide 28: Dividend policy
Dividend policy The Board decided there would be no final dividend declared for FY2009 following a 5 cps interim dividend declared in February 2009 in the form of a fully imputed bonus share issue PGW intends to resume paying dividends once it has completed its initiatives in repaying debt, strength
Slide 29: Governance review
Governance review NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 30: Governance review
Governance review Governance review to examine the balance of skills required and desired Board composition – understanding of farming requirements; – trading experience; and – financial expertise Outcomes to be finalised and announced shortly after the equity raising Board size anticipated to be ei
Slide 31: Appendix A - New cornerstone investor and strategic partner
Capital Structure Appendix A- review New cornerstone investor and strategic partner NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 32: Agria overview
Agria overview ♦ Agria is a China based agri-solutions provider listed on the New York Stock Exchange and incorporated in the Cayman Islands ♦ Agria is engaged in research and development, production and sale of corn seeds, sheep breeding products and certain seedling products. It is based in Beijin
Slide 33: Agria's Chinese footprint
Agria’s Chinese footprint Corn Seeds 12 Provinces – Shanxi, Inner Mongolia, Hebei, Henan, Shaanxi, Shandong, Liaoning, Hubei, Hunan, Heilongjiang Heilongjiang, Jilin and Sichuan Sheep Breeding Jilin 7 Provinces Liaoning – Shanxi, Inner Mongolia, Hebei, Inner Mongolia Henan, Ningxia and Shaanxi Ningx
Slide 34: Cooperation Agreement
Cooperation Agreement The Cooperation Agreement entered into by PGW and Agria provides a framework for working together to create value for both companies through advancing agricultural technology and developing new markets. Opportunities identified include: – joint development and international com
Slide 35: Appendix B - Convertible Redeemable Notes Terms Sheet
Capital Structure Appendix B review Convertible Redeemable Notes Terms Sheet NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 36: CRNs Terms Sheet
CRNs Terms Sheet Issuer PGG Wrightson Limited Holder Agria Corporation Instrument Convertible Redeemable Notes CRNs to the amount of the New Zealand dollar equivalent of US$25 million at the issue date (assumed in this Offer Document to be NZ$32.5 CRNs to be Issued million). Principal Amount per CRN
Slide 37: CRNs Terms Sheet (continued)
CRNs Terms Sheet (continued) Conversion / Redemption Unless otherwise agreed by PGG Wrightson and Agria, PGG Wrightson may elect at its sole discretion to convert or redeem the CRNs at Arrangements any time following 18 months after the Issue Date. In the event that PGG Wrightson elects to Convert t
Slide 38: CRNs Terms Sheet (continued)
CRNs Terms Sheet (continued) Cash Redemption Amount If redemption in cash is made on or before 31 December 2011, redemption in cash shall be at 102% of Principal Amount of CRN. If redemption in cash is made during the two year period after 31 December 2011, redemption in cash shall be at 104%, with
Slide 39: CRNs Terms Sheet (continued)
CRNs Terms Sheet (continued) Anti-dilution rights In the event that PGG Wrightson undertakes a non-taxable bonus issue, share consolidation or subdivision of ordinary shares, the Conversion Ratio will adjust to reflect the relevant event. In the event that PGG Wrightson undertakes a cash issue to ex
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