December 18, 2007

Australia's GrainCorp nets US$52 million from share placement

Grains marketer GrainCorp Ltd has completed a A$60 million (US$52.32 million) share placement to strengthen its balance sheet, following two successive droughts to enable the company to take advantage of future opportunities.

GrainCorp said it had issued 6.4 million shares to institutional and other investors via a book build, with a final price of A$9.40 per share.

Last month, GrainCorp reported a 162 percent fall in annual profit for fiscal 2007 due to the drought and is expected to make another loss in the current financial year.

GrainCorp reported a full year net loss of A$19.8 million for 2006/07, in line with the company's guidance for a loss of A$20 million to A$23 million.

The drought saw grain volumes plunge 79 per cent to 2.3 million tonnes, from 10.8 million tonnes in 2005/06.

Grain exports were also reduced by drought, with one million tonnes shipped compared to 5.3 million tonnes in the prior year.