PCA Chairman Ian Langdon

September 3, 2013

PCA shareholders have been advised by company chairman Ian Langdon to approve the debt-for-equity deal which will see the National Australia Bank secure up to a 20 per cent stake in the company in return for writing off $31.2 million of debt.

Shareholders will vote on the deal at an Extraordinary General Meeting which will be held later this month in Brisbane.

In a letter to shareholders today advising of the meeting, PCA Chairman Ian Langdon said the challenging economic conditions which have prevailed since the Global Financial Crisis have had a significant impact on the company.

“In addition, PCA’s financial performance was adversely impacted by an unsuccessful investment in the Northern Territory and subsequent years of drought and flood, which significantly reduced peanut supply,” he said.

“Consequently, PCA has not been able to leverage its strong market position to achieve satisfactory financial results in this period, and to service or reduce the debt owed to its financier, National Australia Bank Limited (NAB), to a level more appropriate to recent earnings.

“This has resulted in a progressive increase in core debt to an unsustainable level.

“In these circumstances, the PCA Board and management, in conjunction with and co-operation of NAB have been working to improve PCA’s performance and to reduce costs, and in respect of the debt have engaged with NAB to restructure the debt.”

He said the proposed capital restructure would result in the debt owing by PCA to NAB (about $47.75m) being reduced to $16.5 million.

In return, PCA would issue 1,817,276 PCA shares to NAB’s nominee, Equity Management Unit Holdings Pty Ltd (EMUH).

EMUH would also have the right to subscribe to further shares up to a holding of 40 per cent of the issued share capital.

It would be also able to nominate one person to attend Board meetings and general meetings as an observer, and one person to be appointed as a Director.

The deal must be approved by shareholders and the Australian Prudential Regulation Authority.

Mr Langdon said PCA’s Board had “carefully considered the options available to PCA” and unanimously recommended shareholders support the NAB deal.

The EGM will be held at the premises of McCullough Robertson Lawyers at 66 Eagle Street in Brisbane on Friday, September 27, at 10.00am.