AWB Limited – the sole exporter of Australia’s bulk wheat and one of the world’s largest wheat management and marketing companies – today released details of its Share Offer ahead of the company’s planned $860 million listing on the Australian Stock Exchange (ASX).
The listing will see 242 million unlisted shares in the company, owned mostly by Australia’s wheat farmers, commence trading on the ASX in late August.
Up to an additional 31.8 million shares – priced at $3.15 per share - will be made available to institutions, retail investors and wheat growers through the Offer.
AWB Chairman, Mr Trevor Flügge, said listing on the ASX represented a major step in the development of the company which manages around 3 per cent of the value of Australia’s total exports and sells on average 17 million tonnes of Australian wheat a year into overseas markets.
“The Share Offer provides the opportunity for investors to participate in the solid and consistent growth of one of Australia’s largest and most respected companies,” Mr Flügge said.
“Following listing, it provides the opportunity for existing shareholders to receive fair value for their investment, resulting from the increased liquidity and trading of AWB shares.”
Highlights of the AWB Prospectus released today include:
- A forecast after-tax profit of $79.4 million for the year ending 30 September 2001 – a 25 per cent increase on the previous year;
- A forecast dividend of 22 cents a share for the full year of which an interim dividend of 14 cents per share was paid on 4 July 2001.< Investors receiving shares under the AWB Limited offer will be eligible for an 8 cents per share dividend in January next year;
- A public and institutional offer of $80 million; and
- An offer to existing shareholders and AWB employees of up to $20 million.
AWB’s Managing Director and Chief Executive, Mr Andrew Lindberg, said the Offer represented a quality investment proposition.
“Our forecast full year results show a 25 per cent increase in profit, underlining that our growth strategy is working,” Mr Lindberg said.
“We continue to strengthen our core activities in grain management and the provision of financial and risk management products for growers, while diversifying and increasing market share across the grain value chain.
“AWB’s greatest strengths are it’s expertise and experience in the grains industry and extensive and long-established commercial networks among growers, distributors and end-users.
“We plan to utilise these networks and our expertise to further develop our earnings base, while investing strategically across the supply chain, both in Australia and overseas,” Mr Lindberg said.
Mr Lindberg said the expected $100 million in capital raised through the issue of up to 31.8 million additional shares would fund future growth, particularly in the provision of an expanded range of financial and risk management products, and investments that are aligned to AWB Limited’s core business.
“As well as generating additional returns for shareholders, our growth strategy is aimed at achieving better outcomes and lower costs for growers to ensure Australia’s grain industry remains highly competitive.”
The Share Offer opens on 23 July 2001 and is expected to close on 15 August 2001.
All existing shareholders will be mailed a copy of the prospectus and AWB will be conducting a series of grower meetings across Australia’s wheat belt in late July and early August.< Details of these meetings will be announced shortly.
Any inquiries regarding the Offer should be directed to AWB’s Share Registry on 1800 810 032.
A copy of AWB’s prospectus will be available on AWB’s website – www.awb.com.au - as of today.
For further information, contact:
Peter McBride Mark Triffitt
AWB Limited Gavin Anderson and Company
Tel: (03) 9209 2174 or 0417 662 451 Tel: 0413 876 810
- AWB Limited is Australia’s major national grain marketing organisation, and one of the world’s largest wheat management and marketing companies.
- AWB Limited holds the sole licence to export Australian bulk wheat. Australia exports around 80 per cent of its total wheat production and currently has 18 per cent of the world wheat market.
- AWB was responsible for the management of around 23 million tonnes of grain in 1999/2000, resulting in revenues of approximately $5.6 billion, of which $3.8 billion was attributed to growers as pool returns.
- AWB Limited’s five main business areas are:
- Pool Management Services – which primarily consists of the aggregation and global marketing of Australian wheat;
- Finance and Risk Management Products – which consists of the provision of finance and risk management products to growers;
- Grain Acquisition and Trading – which consists of the trading, as principal, of grains and grain related trading flows;
- Grain Technology – which consists of the development and Australian application of leading edge grain related technologies; and
- Supply Chain and Other Investments – which consists of the development of, and direct investment in, supply chain infrastructure and end use grain businesses and the management and trading of shipping capacity.
- AWB has a dual class share structure under which ‘A’ class shareholders elect 7 of the 12 member AWB Limited Board. Only wheat growers producing 100 tonnes of wheat over 3 consecutive years are eligible to hold ‘A’ class shares. There are currently 35,000 ‘A’ class shareholders.
- AWB Limited currently has 64,500 equity (or ‘B’ class) shareholders. The vast majority of ‘B’ class shareholders are wheat producers.
- AWB currently employs approximately 500 people and has 32 offices throughout Australia and internationally.
- AWB has significant expertise in wheat marketing – having a long history and quality reputation for marketing Australia’s wheat production locally and to the world’s major wheat customers;
- AWB is the manager of the export Single Desk – which is not scheduled for legislative review until 2010.< However, the management performance of the Single Desk by AWB will be reviewed in 2004 by the Wheat Export Authority;
- AWB is well-placed to benefit from increased consumption of grain in key overseas markets – including the Middle East, North Africa and Asia, where it is traditionally a major wheat supplier and where population growth and increasing disposable incomes are likely to increase per capita grain consumption;
- AWB has the potential to broaden the range of financial services offered – by increasing the range of options available to growers and tailoring these products to meet growers’ risk preferences and reducing AWB’s reliance on earnings from funding and underwriting National Pool deliveries;
- AWB has the potential to extend the customer base – by offering similar financial services and risk management products to not only growers of grains other than wheat, but also existing end-user customers;
- AWB has the ability to build on its position as the major supplier in the competitive deregulated domestic wheat market – with sales of around 3 million tonnes and a significant investment in grain logistics;
- AWB has the opportunity to diversify its revenue base across the value chain – through commercial investments such as the Five Star Flour Mills in Egypt and the Dimboola Grain Centre in Victoria; and
- AWB has a strong financial position – with projected shareholders’ equity at 31 September 2001 of approximately $750 million which provides AWB with funds to further develop its business, improve its profit performance and pay an attractive fully franked dividend.
- AWB is forecasting an operating profit after tax of $79.4 million for the year to 30 September 2001 - an increase of around 25% on last year’s result.
- AWB intends to pay a fully franked final dividend of 8 cents per Share for the year ending 30 September 2001. Shares issued under AWB Limited’s Share Offer will be entitled to receive the final dividend which is expected to be paid in January 2002.
- The Board declared a fully franked interim dividend of 14 cents per Share for the six months ended 31 March 2001 which was paid on 4 July 2001.<
- Under its Offer, AWB Ltd is offering up to 31.8 million additional Shares at a price of $3.15 per Share.
- The amount raised by the Offer will be between $80 million and $100 million.
- There will be up to 273.3 million AWB Limited shares on issue following the offer.< AWB Limited’s market capitalisation (based on the Offer Price) will be approximately $861 million after listing.
- Existing shareholders holding fewer than 500 Shares have an opportunity to top-up to 500 Shares while those holding 500 Shares or less will be able to sell their Shares through a Share Sale Facility.
- A Class Shareholders who have delivered at least 100 tonnes of wheat over the last three years to AWB and have never owned B Class Shares will be able to acquire up to 2,000 shares at $2.85, a discount of approximately 10%.