GrainCorp has released details of a capital raising, involving a Share Placement and Share Purchase Plan (SPP), aimed at improving the strength of the company's balance sheet and positioning the company for growth and income diversification opportunities.

The placement involves the issue of up to 9.65 million GrainCorp shares with existing and new shareholders, and the SPP will enable current shareholders to subscribe for up to A$15,000 worth of GrainCorp shares.

GrainCorp Managing Director, Mark Irwin said the capital raising is for the strengthening of the company's balance sheet as GrainCorp recover from two consecutive drought-affected years.

''The equity raising will increase our financial flexibility and will reduce the gearing of the company,''he stated.

Irwin said the equity raising will also position GrainCorp for growth. ''GrainCorp will be better positioned to take advantage of growth opportunities in existing businesses, via target projects and capital investment, and to take advantage of income diversification opportunities as they arise.''

Share Placement Overview

• A$60m underwritten institutional placement, or 15 percent of issued share capital

• Fixed offer price of A$6.25 per share
   
• 14.3 percent discount to GrainCorp's 5-day VWAP to May 15, 2009
   
• Book opens Monday (May 18) at 10.00am (Sydney time) and closes at 5.00pm (Sydney time) for Australia / Asia Pacific and 7.00pm (Sydney time) for UK / Europe
   
• The new shares will be fully paid and will rank equally with the Company's existing issued shares
   
• Underwritten by Credit Suisse (Australia) Limited and ABN AMRO Morgans Corporate Limited

Share Purchase Plan Overview

• SPP Offer price is the lower of: 
   
• The placement offer price, being A$6.25 per share; or
   
• 7.5 percent discount to GrainCorp's VWAP over the SPP pricing period, being June 23–29 2009
   
• SPP Offer opens on June 1, 2009 and closes at 5.00pm (Sydney time) on June 29, 2009
   
• Subscriptions will be for up to A$15,000 worth of GrainCorp shares
   
• No brokerage or transaction costs

US$1 = A$1.33882 (May 18)