New Zealand: Zespri shares halted

Shares of the Zespri Group will be halted for two days pending a vote on constitutional changes aimed at strengthening grower ownership and control of New Zealand's statutory kiwifruit exporter.

Shareholders will vote at a special meeting tomorrow on a series of resolutions that will impose a cap on the number of shares they can hold relative to trays of kiwifruit produced, and phase out dividends for non-producing shareholders over seven years. Existing growers who stop producing after tomorrow's vote would cease getting dividends after three years.

The vote comes after shareholders in 2015 approved plans to strengthen grower control amid concerns about an increasing misalignment between producers and shareholders. The changes required an amendment to the Kiwifruit Export Regulations last year.

Of Zespri's 120.7 million shares on issue, some 18.1 million are held by people no longer connected with the kiwifruit industry and a further 29 percent are held by producers at a ratio of below one share per tray, which Zespri deems "under-shared". At the other end of the spectrum, 8 percent of the shares are held by producers at a ratio of more than four shares per tray, known as "over-shared".

According to scoop.co.nz, Zespri wants to aim for a ratio of one share for one tray produced but the new cap would set the limit at four shares per tray. Voting entitlements would be set at the lesser of one voting share per tray or the total number of shares the producer holds. The changes also take into account the rights of owners and lessees of kiwifruit orchards.