THE farmer organisation which founded GrainCorp has quit its $117 million shareholding in the big grain agribusiness.
In a major push to wipe out its debt and diversify its investment portfolio, Grain Growers Limited has walked away from the big grain company its farmer members built when they bought the NSW Grain Corporation’s silo and port facilities back in 1992.
Melbourne-based Austock Securities offered the shares to institutions at $6.95, and 8.7 per cent discount to the closing price of $7.61, in a deal worth about $116.8 million, according to The Australian Financial Review .
“It’s with mixed emotions that the relationship has ended, but after almost 20 years the GrainCorp child has grown up and moved on,” said Grain Growers chairman, John Eastburn.
“And, it’s not a good idea for us to have 70pc of our assets tied to just one investment – we need a much more diverse and better balanced portfolio.”
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.
Under farmer ownership in the 1990s, the former government-owned GrainCorp expanded into grain trading and listed on the Australian Stock Exchange in 1998.
It later acquired Victorian grain handler, Vicgrain, in 2000, Allied Mills’ flour milling business in 2002 (in partnership with Cargill), Queensland’s Grainco in 2003, and global malster, United Malt Holdings in 2009.
Until this week Grain Growers was GrainCorp’s largest shareholder, but it sold all its 16.8 million shares (8.45 per cent of the company) on Monday night.
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