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Category: Business, Economics and Finance / Stockmarket / Rural

Grain cooperative CBH rejects plan to list firm on ASX

Monday, 14 Mar 2016 15:26:15 | Kathryn Diss

CBH said the proposal to commercialise the company lacked transparency. (Supplied: CBH)

The board of Western Australia's farmer-owned grain handler CBH has unanimously rejected a proposal to commercialise the company and list on the Australian Stock Exchange (ASX).

In February, the Australian Grains Champion (AGC) made a bid for the company with the aim of corporatising it and listing on the ASX.

Under the deal, AGC offered grower members up to $1 billion in two tranches, plus shares in the company.

AGC was formed in 2015 by a group of past CBH directors who believe the cooperative needs restructuring to survive.

However CBH chairman Wally Newman said the proposal lacked transparency.

"After careful consideration the board has today written to AGC advising that we reject the proposal and will not enter into AGC's process agreement," Mr Newman said.

"The AGC proposal would result in significant cash leakage for the CBH group. In turn, this would result in less funds being available for ongoing network investment.

"AGC's proposed process agreement would also provide GrainCorp with access to confidential information."

CBH said it would now conduct more than 20 meetings with growers in the Wheatbelt over the next six weeks to discuss what structure they wanted for the company in the future.

"In considering the available options on terms most favourable to our growers, our priority will be to retain the competitive advantage of our modern network", Mr Newman said.

CBH said it had received several enquiries from other interested parties.

AGC director Brad Jones released a statement saying he was not surprised by CBH's decision but was disappointed by its unwillingness to discuss the proposal's merits.

AustraliaPlus


 

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