AWB Limited today introduced structural changes to ring fence its wheat export related operations which will improve and protect the credit rating for AWB Harvest Finance Limited in providing finance to growers who deliver to the National Pool.
AWB Managing Director, Andrew Lindberg, said ring fencing involved separating AWB’s wheat export related operations from the commercial activities of the AWB Group for credit ratings purposes.
“Ring fencing our operations will mean AWB Harvest Finance Limited will achieve the highest possible credit rating for its funding of financial products for growers who deliver to the National Pool,” Mr Lindberg said.
“This will assist the company and growers by ensuring our Harvest Finance products are as competitive as possible,” Mr Lindberg said.
Mr Lindberg said AWB had, over time, diversified its operational base to reduce its reliance on the grain production cycle.
This had increased its risk profile and led to an inevitable downgrading of its credit rating.
“To ensure we can protect the credit rating for AWB Harvest Finance funding, and still retain our operational synergies, AWB has developed a revised structure for the AWB Group,” Mr Lindberg said.
“This will effectively separate the wheat export related activities from the risks associated with the commercial operations of the Group,” Mr Lindberg said.
To achieve this, AWB has created three wholly owned subsidiary companies through which operations will be conducted.
AWB Harvest Finance Limited – will provide growers delivering to the National Pool with a suite of financing alternatives.
AWB Services Limited – will provide, on a fee for service basis, the management and business infrastructure required to support AWB group operations, including asset management (building, IT software and hardware etc) and staff.
AWB Commercial Funding Limited – will provide treasury and funding operations for the commercial subsidiaries of AWB Limited.
The ratings expected by AWB with introduction of the ring fencing include:
AWB Harvest Finance
AWB Ltd Standard and Poor's: BBB stable outlook
Standard and Poor’s: A1+ (short term) AA- (long term) stable outlookMoodys: P-1
For more information contact: Ryan McKinlay (03) 9209 2324 or 0408 347 282 or Peter McBride (03) 9209 2174 or 0417 662 451