Friday 25th Sep, 2020

Shareholders approve Graincorp’s United Malt demerger

Four grain storage expansion projects have been completed as part of the CBH Group’s upgrade to its network, adding additional capacity for 446,000 tonnes.

Graincorp’s shareholders have voted overwhelmingly in favour of the proposed demerger of United Malt Group.

United Malt Group is currently a wholly-owned subsidiary of Graincorp, which will not become a standalone company listed on the ASX. It will own and operate the international malt business currently owned by Graincorp.

Following the demerger, United Malt is expected to be the world’s fourth largest independent commercial maltster, with malting houses in Canada, the Unites States, Australia and the United Kingdom.

Graincorp will retain a minority ownership interest, 10 per cent of the United Malt shares, immediately following the demerger.

The company’s board of directors unanimously recommended the move, due to the potential to unlock value for shareholders by creating two ASX agribusiness companies. In addition, the board believes that the full value of United Malt’s business has not been fully recognised by investors in recent years, as it has formed part of a broader group whose business if affected by the variability of weather and crop cycles on Australia’s east coast.

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Graincrop Chairman Graham Bradley said it was pleasing to receive such strong shareholder endorsement for the demerger.

“On behalf of the board, I would like to thank our shareholders for their overwhelming support,” he said.

“Subject to court approval, the demerger has the potential to unlock significant value for shareholders, with Graincorp and United Malt having strong foundations for success and growth.”

Graincorp will now seek orders from the Federal Court of Australia to approve the scheme of arrangement to give effect to the demerger at the second court hearing, which is scheduled for 20 March 2020.

If approved, Graincorp intends to lodge the orders of the court with the Australian Securities and Investments Commission on Monday 23 March, where the demerger scheme will become effective for the purpose of the Corporations Act.