Agribusiness Elders, which is back in profit after six years of losses, has gone on market to buy back up to $30 million of its hybrid notes at $80 each.
CEO Mark Allison says the offer is part of plans to simplify the company’s capital structure.
The hybrids were issued at $100 each in 2006 with a margin that reflected the financial market at the time.
Since the GFC, economic and market conditions and Elders’ financial position have changed dramatically. Elders hasn’t paid a distribution on the hybrids since June 2009.
“This offer provides additional liquidity in what is a relatively illiquid security and provides an opportunity for holders who wish to sell to do so on a first-come first-served basis,” says Allison .
Purchases will be funded from current year earnings. Elders sales have been improving and the company is now back in profit. The company posted a 83% rise in profit to $15.86 million for the half year to March as livestock prices rose. Sales were up 2% to $645.51 million.
The maximum price of $80 is a premium to the closing price of $74.30 yesterday.
Elders shares are trading more than 7% higher at $4.05.