New Zealand's biggest meat company, Silver Fern Farms, says it is still "in discussions" about big rural company PGG Wrightson's "unconditional and enforceable" offer of a $US220 million ($A327.04 million) cash injection.
Wrightson reneged on the bid to buy 50 percent of the cooperative - formerly known as PPCS - when it was unable to pay the first part of the settlement on October 1.
"Although the transaction is, and remains, unconditional and enforceable, Silver Fern Farms is currently in discussions with PGG Wrightson to evaluate whether any alternative proposals are feasible for shareholder consideration and to deal with the default on the previously approved transaction," Silver Fern said.
Silver Fern chairman Eoin Garden said Wrightson would be in default if the transaction was not completed.
Wrightson chairman Craig Norgate has admitted that it is "unlikely" that its partnership with Silver Fern Farms will get off the ground.
"It is fair to say that we are now unlikely to be able to consummate the transaction in its current form within an acceptable timeframe to Silver Fern Farms," Mr Norgate told the rural services company's annual meeting in Christchurch.
He claimed the company was working through options to achieve its original aim of enabling farmers to earn better returns from red meat: "We are working hard to get our partnership with Silver Fern Farms back on track".
Mr Norgate said the $US220 million ($A327.04 million) deal - on which Silver Fern was relying for significant debt repayment, and for restructuring its procurement and processing - was scuttled when bankers would no longer accept a variation in the way the equity component of the deal was funded.
"The required $US110 million ($A163.52 million) of equity was available by way of the placement and the underwritten share purchase plan; however, this was a different mix of equity from the package originally agreed with the banks - that being for a placement of the full $US110 million ($A163.52 million)," he said.
"When it came time for the banks involved in our transaction to provide final approvals not all did so, and we were thus unable to settle the first payment due on that date."
Wrightson and Silver Fern were planning to take a more holistic approach to meat supply, closely linking production and processing to the specific requirements of key customers.
Mr Garden told Silver Fern's annual meeting that his board is confident that further benefits will accrue "in the coming years" from improved efficiency in the company's processing operations and from its branding and marketing initiatives.
He predicted the 2009 financial year's profits will return to a "more realistic" figure following a poor performance in 2007 and strong result in 2008. The company reported a $US117 million ($A173.93 million) turnaround with a $US37.7 million ($A56.04 million) net profit in the year to August 31.
The comparable figure - adjusted to new international accounting rules - for 2007 was a loss of $US79.3 million ($A117.88 million).
