RICE farmers and other shareholders will get their first look at SunRice’s much-anticipated capital restructure plans at a series of meetings in the Riverina starting next week.
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The meetings in the first two weeks of March will provide an update on the grower-owned marketing and processing company’s ownership structure, and a glimpse at the sort of model proposed.

The SunRice restructure proposal, developed by the Macquarie banking and investment group, is aiming to give outside investors a chance to contribute to the company’s capital pool without letting control of the business slip away from growers.

The company wants “adequate capital backing to underpin SunRice’s growth”, while also preserving the rights of A Class (grower) shareholders and enhancing the value of B Class shares owned by growers, their families and some and industry-related individuals.

SunRice currently has a dual share co-operative style ownership structure, with its B Class shares on the National Stock Exchange, currently trading about $3.30 each.

Next week’s shareholder updates will coincide with tours of SunRice’s operations at Leeton and Deniliquin, including inspecting a $9.8 million capital upgrade at the Leeton microwave rice packing plant.

Another key meeting will be at a Jerilderie rice field day next week, while growers, shareholders, their accountants and financial advisors have been also invited to discuss the technical details of the potential structure at a Jerilderie workshop on March 6.

A series of smaller district “shed” meetings on farms and at community halls will be held across the Murray and Murrumbidgee valleys the following week.

SunRice chairman Mr Laurie Arthur has urged all growers and shareholders to provide feedback to help determine the next steps taken in the capital structure review.

“We’ve always said we would only come back to shareholders when we had a model that could deliver on the review’s objectives,” he said.

“We remain non-negotiable around preserving A Class shareholder or grower shareholder control on an ongoing basis.

“We’ve invested the necessary time and resources to ensure we have these protections in place and we’re now ready to share this structure and seek feedback.”

Mr Arthur said the meetings would be important in determining SunRice’s future and input from growers and shareholders was vital.

He urged as many people as possible to attend to “understand the detail, ask questions and provide comments”.

SunRice chief executive officer Rob Gordon said the company had set itself a difficult task to ensure grower control of the company was not jeopardised and it continued to retain a board of “like-minded people with farmers’s best interests at heart”.

“But as we really need access to external equity, we’re pulling together quite a difficult set of objectives,” he said.

“You can really only make the sort of strategy decisions we’re considering in the structure review in good times for the business, so now is the ideal time to doing something.”

“At the moment our balance sheet funds our innovation and marketing growth.

“If we are to continue our growth and be a significant player in the food industry in Australia and overseas it’s likely we will need to have a stronger balance sheet.”

Mr Gordon said SunRice did not have an immediate list of spending plans or priorities to allocate funds towards if it did receive a capital injection from new investors, but it needed to position itself for the future.

“We need to be able to respond to growth and capital needs if required.”

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