Viterra has entered into a grain volume insurance programme to insure the combined company against lower than expected grain production in South Australia. This new programme will allow ABB to make changes to its storage and handling charges for the benefit of Australian growers if the scheme of arrangement is implemented. Viterra has had grain volume insurance in place as part of a comprehensive risk management strategy since 2005.

 

The insurance programme will allow the combined operation to eliminate the ABB grain volume variation charge in South Australia, removing grower exposure to the charge during difficult crop years.

 

The two companies have also reviewed ABB's storage and handling charges in an effort to simplify the disclosure to ensure that it is in a strong position to actively compete for growers business on a daily basis. More details on the revised fee structure will be provided once the integration of the two companies has commenced.

 

The insurance coverage, contingent upon the successful combination of ABB and Viterra, will reduce the financial impact on ABB Grain should adverse weather conditions impact grain receivals in the future. The programme would begin to pay out in the event of approximately a 33-percent drop in average annual South Australian grain production levels and would fully pay out in the event of a 65-percent drop in production. The maximum payout under the program is A$27 million (US$21.5 million).

 

Viterra Inc. is Canada's leading agribusiness, with extensive operations and distribution capabilities across Western Canada, and with operations in the US, Japan, Singapore and Geneva.