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 Mediation Agreement with PGWTue, 3/03/2009 11:40:00 a.m. On 22 August 2008, Silver Fern Farms Limited and PGG Wrightson Limited (PGW) entered into an agreement whereby PGW agreed to subscribe for a 50 percent shareholding in Silver Fern Farms Limited for consideration of $220 million and the parties would enter into various related agreements, including in relation to livestock procurement by PGW for Silver Fern Farms. This proposal was approved by Silver Fern Farms' shareholders, and the agreement with PGW became unconditional on 8 September 2008. PGW subsequently defaulted on the settlement of the unconditional binding contract and Silver Fern Farms terminated the agreement on 3 November 2008. PGW has accepted that it was in breach of its agreement, and that Silver Fern Farms justifiably terminated the contract. The issue between the parties now relates solely to compensation for damages caused by PGW's default on the unconditional contract, and the costs of the transaction and costs flowing from the breach. Since November 2008 there have been discussions between the parties in an attempt to resolve differences over the appropriate level and form of compensation payable to Silver Fern Farms. Regrettably the parties have been unable to reach agreement, with PGW considering the damages to be minimal ($10 million) and Silver Fern Farm believing that they are considerable. Silver Fern Farms and PGW have today agreed to appoint retired High Court judge Robert Fisher QC, to mediate an agreement within an agreed, short, timetable. The mediation, unlike arbitration in that it is not binding on either party unless it results in an agreed settlement, is scheduled to conclude by 18 April 2009. Recourse to mediation does not prevent Silver Fern Farms from commencing litigation if the mediation does not produce an agreed outcome. A further update will be issued in due course. |
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