Donegal Investments cuts mushrooms stake amid court row
Donegal Investment Group's (DIG) has begun to reduce its formerly 35pc shareholding in Elst, the holding company for Monaghan Mushrooms. But DIG is appealing a valuation placed on the stake by the courts.
DIG said yesterday that its stake in Monaghan Mushrooms, Europe's biggest mushroom grower, has been cut to 30pc and that it has recognised a gain of €800,000 from the transaction.
In May companies linked to Monagahan Mushroom's main shareholder, the Wilson family, were ordered to buy out the stake after DIG took a shareholder oppression complaint to the Commercial Court.
DIG took the complaint against holding company Elst's main shareholder Danbywiske, which is owned by Monaghan Mushrooms' founder Ronald Wilson. DIG claimed it had been excluded from the affairs of Elst, where it is a minority shareholder.
The court ordered Danbywiske to pay €30.5m to buy-out DIG's stake.
In financial results released yesterday, DIG said that a partial disposal of the stake has already been recognised for accounting purposes, resulting in an exceptional gain of €0.8m.
However, a court valuation that sets a price of €26.3m on the balance of the stake is under appeal to the Court of Appeal, where the case is scheduled to be heard in April next year, according to the results.
The former Donegal Creameries made an after-tax profit of just under €2m for the six months to the end of June, revenue declined marginally from €39.2m to €39.1m and operating profit rose by €300,000 to €700,000 due to growth in the speciality dairy division.