24 Dec 2010

Pyne Gould to lose $30m selling Wrightson stake

1:31 pm on 24 December 2010

Pyne Gould Corporation is forecasting a loss of between $31 million and $33 million in the six months to December, mainly because of paper losses on selling its stake in PGG Wrightson.

The loss also reflects impairments of some property loans and a loss at its wealth management business, Perpetual, of up to $4.5 million.

Pyne Gould had valued its PGG Wrightson stake at 82c a share, well above the market's view of what they were worth.

The head of private wealth research at Craigs Investment Partners, Mark Lister, says there's a question of credibility about Pyne Gould's valuation.

He says Pyne Gould have consistently rated the PGG Wrightson shares at about 80c for accounting purposes.

"It's hard to look at that view and see it as credible," Mr Lister says,

pointing out that Pyne Gould has now announced it'll sell its 18.3% stake in PGG Wrightson to the Chinese firm Agria for 60c a share.

The investment concern says the acceptance of Agria's offer will result in a $30 million loss on Pyne Gould's balance sheet.