E-Malt.com News article: 3292

Australia: Grower control of ABB is built into the company’s constitution and will be retained post-merger with AusBulk and United Grower Holdings, ABB Grain announced on 16 September 2004. During the recent series of meetings held around South Australia and Victoria it was emphasized that ABB’s grower control structure will be retained going forward and will ensure that growers hold the key to the company’s future.

Grower control of ABB is locked into the company’s dual class structure in which A-Class “grower” shares elect the majority of directors and have unrestricted voting rights. The A-Class shareholders’ voting rights ensure that no merger or takeover or significant change in business can occur without approval by 75% of A-Class shareholders voting.

ABB’s B-Class or equity shares, are traded on the Australian Stock Exchange, and hold the majority of the company’s equity but elect a minority of directors and have restricted voting rights.

If shareholders of ABB, AusBulk and UGH vote in favor of the merger proposal on Tuesday, September 21 then the new ABB’s B-Class shareholders will be dominated by growers initially, as AusBulk (excluding UGH) and UGH shareholders will be swapping their shares for B-Class shares in ABB.

However even if growers choose to sell these shares on the Stock Exchange ABB will still remain grower controlled through the A-Class shareholdings.

AusBulk and UGH shareholders who do not already have an ABB A-Class share and have delivered to AusBulk or AusBulk controlled sites such as Australian Bulk Alliance storages, will be entitled to an A-Class share and will be sent a letter by the end of October telling them about their eligibility.

Any grower who delivers an average of 25 tonnes a year over two years (from the 2004/2005 harvest, three years), will be entitled to an ABB A-Class share at a nominal value. This means that any new grower coming into the industry or in the case of farm families trading in their own right for the first time will become eligible for an A-Class share, and hence a say in the future of ABB.

This system means that even if a grower chooses not to buy B-Class shares in ABB they will still have a say in the future of the company if they regularly either deliver to an ABB controlled site in the years ahead or sell grain to an ABB company. This system of grower control will not change unless growers want it to change.


22 September, 2004