Commercial 'Pastrol Holdings to stay in farming'

Press, 28 May 1979, Page 18

Commercial 'Pastrol Holdings to stay in farming'

PA Auckland No decision has been tnade by the directors of New Zealand Pastoral Holdings, Ltd, to abandon pastoral and other types of farming, according to the chairman (Mr D. N. R. Webb). This is one of the points he makes in a letter to i shareholders, against a back- : ground which includes Mr P. jP. G. Pharazyn seeking in--1 junctions against the sale of i properties, extraordinary i meetings being called by the i directors and sought by Mr * Pharazyn, and a take-over bid due on June 5 from Christchurch-based H. W. Smith, Ltd. The board has called an extraordinary meeting for June 12 to discuss recent events and future plans, and to seekshareholders’ approval for the sale of a subsidiary, Pastoral Holdings (Waewaepa), Ltd, to agricultural Inventories Management, Ltd, of Hastings. On April 27, in an interim judgment, Mr Justice Holland refused to grant an injunction to stop the sale of Pastoral Holdings (Waitoru), ’Ltd, in the King Country,j ■ which has since been sold, i ’but adjourned until the June; 18 hearing of a similar application relating to Waewaepa. In his letter, Mr Webb says his board decided to call the June 12 meeting notwithstanding advice from Pastoral’s legal advisers that the sales of Waitoru and Waewaepa were not in contravention of the company’s article 86.

The company’s legal advisers supported the baord’s opinion that neither Waitoru nor Waewaepa constituted the “main undertaking” under article 86. Mr Webb recalls the directors had signalled their intention to lead the company into horticulture, and

.he claims shareholders had j opportunities to comment at past annual meetings. He says: t'there has been no decision by directors to abandon pastoral or other types of farming. “The company is still active in dairying and dairy development and beef fattening, and it will extend again into further pastoral activity when a suitable opportunity occurs — one hopefully which will not involve such a deep outlay on funds for land purchase.” He states the recent acquisition of a kiwifruit property will produce a better cash profit than either Waitoru or Waewaepa, and this property “is still only halfway to full production.” The board is sure it was the horticultural plans which attracted the latest take-over bid of 210 c a share, on which the directors will report

;when they have examined 'the terms. i Mr Webb notes that Pastoral’s shares on the market now stand at 200 c or better after having been at or below par (100 c last year. He makes a plea, that in any corporate structure directors “must have adequate discretion to carry on the normal business of the company and asks shareholders to endorse board actions.

Mr Webb notes that Mr Pharazyn and eight other shareholders have requisitioned an extraordinary meeting; he sees no point in holding two meetings, but, if that group persists a second meeting will have to be held, he says.

However, Mr Webb says, “it will be the Court that will decide the fate of the Waewaepa sale.”