John Eastburn.IN A major push to wipe out its debt and diversify its investment portfolio, Grain Growers Limited has walked away from its 70 per cent stake in Western Australian-based farm information outfit, Kondinin Group.
The company handed the Kondinin keys to its junior partner, the Aspermont group, best known for its publishing, research and information services for the construction, mining, oil and gas industries.
After repaying about $50m in debt, the grower body will have about $90m-plus to provide ongoing funds to contribute to grain research, farmer training and other grower “capacity building” initiatives it supports.
Grain Growers chairman, John Eastburn said the rationale for selling the majority stake in Kondinin was similar to its earlier sell-off of its GrainCorp stake.
Aspermont was better placed to grow Kondinin’s specialist information and product research services to farmers, leaving GrainGrowers to put its money elsewhere.
Grain Growers initially invested in Kondinin about 10 years ago as part of a $1.5 million rescue package for the then financially stretched group, but was reducing its ownership stake before selling to Aspermont for an undisclosed sum last week.
Grain Growers chief executive officer, Mark Allison, said there were no plans to rationalise the organisation’s other investments – BRI Australia in Sydney and Agrecon in Canberra.
Agrecon provides site specific grower information services including likely weather conditions and crop variety and soil performance forecasts, while BRI conducts research on grain quality and for growers and the milling and export sectors.
Grain Growers would continue to fund certain Kondinin Goup research and other similar industry projects as part of its public good initiatives for the its 17,000 members and the wider grain sector, Mr Allison said.
It currently distributes about $2.3 million to research projects and supports farmer development initiatives such as Innovation Generation conference, Nuffield Foundation scholarships overseas, and university crop competitions.
Mr Eastburn, who farms at Baradine in northern NSW said revised strategies for investing the company’s funds and future industry funding initiatives would be released in coming months.
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