AGC come out swinging

08 Jun, 2016 11:35 AM
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AUSTRALIAN Grains Champion (AGC) have gone direct to growers this week seeking to 'correct misinformation' about its proposal to corporatise CBH Group.

More than 4,000 WA growers have been sent a USB media card and letter this week from AGC directors that retierates the AGC proposal and seeks to clear up confusion about the unsolicited offer, which was rejected by the CBH board in March.

The USB, which includes an audio clip from AGC grower director Brad Jones as well as videos of AGC directors answering questions about the deal.

In the pre-recorded audio file, Mr Jones said there had been much speculation in regards to AGC, but there were two main parts of the proposal.

"Firstly, we want to reform CBH's ownership, changing it to a public listed company, listed on the Australian Stock Exchange (ASX).

"This would unlock [growers] long held equity in CBH, converting into cash and valuable shares that sit on [the] farm balance sheet under [grower] control,"Mr Jones said.

"Second, this new structure would ensure CBH has the funding and is set up to compete strongly on the world stage.

"Under our proposal, growers retain significant ownership and control of the company upon listing."

An AGC spokesperson said the latest campaign to growers was to ensure there was no misinformation in regards to the proposal and remind WA growers that the AGC proposal was still alive.

"We are currently reviewing our position to ensure that our proposal provides maximum benefits to WA growers," he said.

There are currently two options open to the AGC in terms of allowing growers to directly vote on the proposal.

AGC could go through the CBH board a second time after the initial rejection in March or go direct to growers.

CBH are currently undergoing a governance and structural review, where several models for part, or total, corporatisation are likely to be put to growers in September.

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READER COMMENTS

peter ian staker
8/06/2016 5:24:37 PM, on Farm Weekly

Interesting, no coverage on how the directors of AGC will personally benefit from success of this proposal.
Deregul8
8/06/2016 6:18:41 PM, on Farm Weekly

All the CBH directors had to do was allow growers to have their say instead of forcing us all to take their word on what is in our best interests. Leaves a sour taste in the mouth when these agrarian socialists think they can take this company head to head with the wave of competition their high costs are inviting into the State. All growers need focus on is are their costs rising or coming down? If they're rising, the board is failing.
Ace
8/06/2016 6:20:30 PM, on Farm Weekly

Building on farm storage to take advantage of cheaper paths to market than through CBH. Bugger leaving $20-30 a tonne on the table for CBH to waste on investments overseas and interstate.
Consolidated
8/06/2016 6:31:57 PM, on Farm Weekly

Dreyfus has up country super sites planned for east of Northam on the standard guage and also up at Muchea. Their target - 2-4mmt of the closest to port tonnes they can gather. In doing that, CBH would likely survive a couple of years before the receivers would have to move in. And all that grower wealth evaporates off into the ether. Boils my blood!
boris
9/06/2016 7:36:58 AM, on Farm Weekly

Well done Brad and AGC, your proposal eliminates all the politics that CBH is infested with. We desperately need a commercially focused CBH not one that provides a seat at a table for an agri-politician that isn't really interested in farming anyway. Whilst AGC are up against a hugely resourced propaganda machine, at the coal face, growers are beginning to listen. I'm glad AGC are here for the long haul, its just unethical for the board to deny growers a vote on such a fantastic proposal.
Interested Party
9/06/2016 10:27:29 AM, on Farm Weekly

Very interesting. In looking at the CBH balance sheet I would suggest funding is not an issue. Listing is another matter as grower control is immediately lost. Ask the farmers over here on the east coast what they think about listing and where it has left a lot of them.
Rural Realist
9/06/2016 11:39:45 AM, on Farm Weekly

Mr Jones is a bright fella. Proposes groups of large farms building shared storage facilities so that they don't need to travel more than 15km. Where have I heard that idea before?
Brad Jones
9/06/2016 2:08:57 PM, on Farm Weekly

Peter the shares we would be issued upon success would be all shown in the information memo given to growers prior to a vote, complete transparency. If you don't like it vote no: that's democracy. RR the idea of shared storage would be linked direct to end user and have the ability to provide them with quality specs very close to what they require for their processing, it would have full traceability and the more efficient supply chain would be reflected in farm gate values. Not sure where you got the 15 km distance travelled from?
Brad Jones
9/06/2016 3:01:10 PM, on Farm Weekly

Interested Party as you know WA is export focused and will always remain that way so the CBH supply chain will never cease to exist. Its structure will and should evolve and this an opportunity for growers to increase their wealth and improve their balance sheets. This would lead to confidence to invest in innovation and technology to drive costs of production down and enhance our ability to compete with the nthn hemisphere production systems. There are numerous benefits in having strong individual businesses that create a stronger industry.
peter ian staker
9/06/2016 6:23:45 PM, on Farm Weekly

Could we have a rough, ball park figure now please Brad?
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