June 28, 2007

Australia's ABB Grain plans move to one class of shares
 

Australia's ABB Grain Ltd. Thursday (Jun 28) outlined details of how it would move to a one-class share structure through redeeming its A-Class or grower shares and leaving its 147 million B-Class shares on issue.

Chairman Percy Gunner said the dual share class structure was created when the company was privatised in 1999 to ensure barley was exported to the best advantage of growers while the company managed a barley export monopoly in South Australia, where it is headquartered.

ABB Grain will no longer manage the export monopoly from Sunday, so the justification for A Class shares no longer exists, he said in a statement.

"A streamlined single class share structure will enable ABB to more easily access capital, improving ABB's capacity to offer cash prices in a deregulated and a competitive range of services to growers," Gunner said, adding that the company's grower traditions will continue.

The new constitution will maintain a limit of 15 percent on any one shareholder, making a takeover of the company difficult without the support of 75 percent of the vote, he said.

About 57 percent of B-Class shares are based in rural areas.

The company will seek shareholder approval for the redemption at a meeting Jul 31.

In considering the move, which the board unanimously recommends, directors never intended A Class shares to have an economic interest in the company and so do not warrant additional payment above their redemption amount of A$1/share.