Published 30 June 2010
The company fronted by controversial Chinese entrepreneur May Wang, UBNZ Funds Management Ltd, has taken a 19.5% stake in struggling NZX-listed agricultural research company Genesis Research & Development Corp Ltd.
The transaction was completed yesterday, one day after Ms Wang’s creditors approved a personal debt-compromise scheme by her at 6c:$1, and at the same time as the High Court adjourned a bankruptcy application for a month.
UBNZ is in line to buy a portfolio of 16 farms held by the Crafar family, but being sold by the receivers’ of the Crafars’ companies. That tender is now scheduled to close with Bayleys on Tuesday 6 July.
Comment: The Chinese investment in the struggling, but complementary, research business puts the lie to the outcry by some New Zealanders over the sale of farmland, when there is a distinct lack of faith in this country in advancing research which would improve the return from farming.
Genesis suspended its New Zealand operations on 3 May for lack of funding, but chief executive Stephen Hall said then it was negotiating several transactions intended to maintain value for shareholders. It was also negotiating the placement with UBNZ, at that time unnamed.
Mr Hall said yesterday the placement of 7.4 million shares was at 6c/share, raising $446,278, and was made to a group of investors represented by UBNZ.
“Genesis is in discussions with the new investors about further investment. When discussions are concluded a proposal will be presented to shareholders to approve any issuance of further shares to the investors,” he said.
The first opportunity for further disclosure is the Genesis annual meeting, which happens to be today.Mr Hall added: “Genesis is also reviewing the possibilities of dairy industry product development & research contracts, which would be faster & lower risk than the previous therapeutic projects. This would build on our understanding of immunology & inflammation which has been developed since Genesis was established in 1994. The change in focus recognises the investment environment in New Zealand and the lack of funding support from the Foundation for Research Science & Technology for cutting-edge high-risk biotechnology projects.“Discussions are continuing with a number of groups who are considering investment in Solirna Biosciences Ltd, which would allow the further development of its single-stranded gene silencing technology.“Other Genesis assets, including the equity interest in Real Time Genomics Inc and royalty rights, will be retained by Genesis until value can be realised for shareholders.”
Want to comment? Go to the forum.
Attribution: Company release, court call, Crafar farms, story written by Bob Dey for the Bob Dey Property Report.