August 30, 2006

AWB acquires bank loans and shifts away from agriculture

Wheat exporter AWB said Tuesday (Aug 29) it has acquired the Adelaide Bank's US$160 million loan book, in what was seen as an effort to diversify away from the grain business.

Landmark, AWB's stock and station business subsidiary, announced the bank's rural loans portfolio would be integrated into its newly formed Rural Trust.

The announcement comes after AWB decided last November to expand Landmark's money market activities by creating a trust which would lend direct aid to farmers.

AWB has been buying businesses to insulate itself from the uncertainties of crop harvests and other downturns.

At present, AWB is facing court cases possibly involving millions of dollars of settlements because of its involvement in the Iraqi bribes scandal.

AWB's move represented a rare opportunity to acquire an established loan book with a good credit risk and geographical spread, said Colin Taylor, Landmark's general manager financial services.