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Rice-growing bodies support proposed ASX listing of SunRice

by Grain Central, 31 August 2018

THE Ricegrowers’ Association of Australia and the Rice Marketing Board (RMB) of NSW have voiced their support for the proposed listing of Australia’s single-desk rice market, SunRice, on the Australian Stock Exchange (ASX).

A rice crop growing in the Riverina earlier this year. Photo: Rod Gribble

RGA has encouraged its grower members to vote in support of the proposal because it is seen as enabling SunRice to raise capital required to implement its five-year growth strategy.

RGA said this capital would help SunRice deliver a more competitive price for rice growers to ensure the crop remains a viable option within farming systems, and secure future success for the rice industry in southern NSW’s Riverina district.

RGA president, Jeremy Morton, said RGA did not believe the proposed listing would change the fundamental purpose of SunRice.

“We feel that this proposal enhances SunRice’s ability to achieve its overarching purpose of receiving, processing and marketing rice, in order to achieve long-term improvement in both the returns for growers and the profitability of the company,” Mr Morton said.

SunRice sells branded and value-added rice products on the domestic and export markets, and its growth strategy includes investment in farming systems, supply chains, infrastructure and marketing.

The RMB is responsible for obtaining the best possible monetary return for ricegrowers in accordance with NSW Government vesting and export legislation, and said it has found no reason to expect an adverse impact on vesting arrangement from the proposed listing.

RGA has asked its members to review information available to them and gain advice when needed about the proposed listing ahead of the vote on whether to support it at SunRice’s annual general meeting on 20 September.

“The RGA strongly encourages every grower member to make their vote count. In doing so, we recommend growers consider the current and future opportunities and challenges faced by the Australian rice industry.”

The Riverina rice industry has lost area to cotton in recent years due to high prices for the fibre, and increased ginning capacity.

Tree nuts and some other crops have also cribbed area from rice.

The board of SunRice announced plans to list on the ASX in May through the transfer of its B-Class shares from the National Stock Exchange.

If approved by shareholders, the ASX listing will remove current B-Class share ownership restrictions and the 5 per cent shareholding cap, and will allow anyone to invest in SunRice B Class shares up to a new maximum 10pc shareholding cap.

This will allow the company to take advantage of investor appetite for Australian branded fast-moving consumer goods and agri-stocks, while retaining its dual class structure and A- Class grower shareholder control.

For the proposal to proceed a 75pc majority vote of both A and B Class shareholders is required.

For the year ended 30 April, 2018, SunRice reported a consolidated revenue of $1.2 billion, a 6pc increase on the previous year (FY17), and a net profit after tax of $45.1 million, a 32pc increase on the previous year.

Source: RGA, RMB and SunRice

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