Hellaby’s has new base and strategy

Press, 4 October 1985, Page 8

Hellaby’s has new base and strategy

R. and W. Hellaby, Ltd, which on Tuesday sold its three freezing works to Canterbury Frozen Meat, Ltd, for S4OM, is ready to move on new investment strategy and financing plans. The deputy chairman, Mr John Forsythe, said in Dunedin yesterday that, under the direction of Mr Bruce Judge, it will “become a vigorous participant in New Zealand business affairs." Mr Judge, formerly of Christchurch, is chairman of Ariadne, Australia, Ltd. Ariadne bought CFM’s 42 per cent shareholding in Hellaby on Tuesday. Hellaby’s plans include: • Acquiring a 32 per cent stake in Dunedin-based Alliance Textiles, Ltd. Contracts are held for the purchase of 15,586,000 shares, subject to approvals by shareholders and regulatory authorities. • Increasing Hellaby’s issued capital to 320.6 M by the issue of 12.5 M 50c shares. • Announcing a one-for-five cash issue at 120 c a share to raise a further $9.9M. • Moving Hellaby’s head office from Auckland to Dunedin. • Changing Hellaby’s financial year to June 30. • Appointing five new directors to the board of Hellaby. Mr Forsythe said that, following these moves, Hellaby would look to consolidate its profit base “before moving on its next round of acquisitions.

“With the sale of its three freezing works to Canterbury Frozen Meat and the repayment of most of its hlchinterest borrowings, Hellaby has now moved out of a difficult situation,” said Mr Foraythe. “The industrial expansion and strategic investment programme we are developing will be funded from equity by way of the share and one-for-five cash issue. “This will give us a strong profit base and a balance sheet with a sound ratio between borrowing and capital. Future investments are likely to be funded from borrowing rather than equity. “Directors anticipate that a dividend of not less than 10 per cent will be paid for the nine months ending June 30, 1986. We do not expect to call on shareholders for any further capital in this financial year,” he said. "The move of Hellaby’s head office to Dunedin will not result in staff redundancies. Our head office will be a small, specialised unit. It is planned to continue to run our meat operations from Auckland. ' "It is also Hellaby’s intention to retain its wholesale and retail meat operations, its pig fanning interests and its bacon, ham and processed meat units.” The new directors appointed to the board of Hellaby in addition to Mr Bruce Judge are Messrs Reid Jackson and Graeme Marsh, of Dunedin, and Terry Moore and Graeme McKenzie, of Auckland. With the transfer of the head office to Dunedin, Messrs

Jackson and Marsh are expectted to play a major role in establishing Hellaby’s future development. The Hellaby board has already confirmed the purchase of a Dunedin company, Motortime, Ltd, which is extensively involved in financing of motor vehicles. The financial moves to achieve the new structure will see Hellaby allot 1.5 M fully paid 50c shares to the shareholders of Motortime, Ltd, and take up contracts to purchase 15.57 M shares in Alliance Textiles. Shareholders approval will be sought for directors to have authority to settle for the purchase of the Alliance shares by the allotment of up to 11M fully paid 50c shares in Hellaby. The one-for-five cash issue will be made later in the year at 120 c for each share. The issue will be renounceable and fully underwritten. An extraordinary general meeting of Hellaby Is being called for Thursday, October 24, to seek shareholder approval for the issue of shares for the Alliance acquisition. The meeting will be held in Dunedin. Sir Alan Hellaby will continue as chairman of Hellaby’s. The Hellaby move has been welcomed by Alliance. The managing director, Mr Farquhar McKenzie, said: “We have a now major shareholder with the potential to offer considerable financial backing and which, in turn; has a parent. In Ariadno, with major Australian and international connections.”