Elders confirmed today it will not pay a distribution to its long-suffering hybrid shareholders for the next quarter.

Hybrids are a form of unsecured loan that attract quarterly dividends or conversion to ordinary shares.

The collapse of the proposed sale of Elders agribusiness to RuralCo has left the company with too much debt.

“Hybrid holders will be aware that the company’s syndicated debt package prohibits payment of hybrid distributions (and dividends in respect of ordinary shares) until such time as the repayment of that syndicated debt,” Elders chief executive Malcolm Jackman said today in a statement to the stock exchange.

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“In its previous notice to hybrid holders on 28 December 2012, it was envisaged that all proceeds from the sale of its Rural Services (ERS) business would, in conjunction with any proceeds from the sale of Futuris Automotive, be used to repay debt.

“However as the company informed the ASX on 18 June 2013, an inadequate offer was received for its ERS business, and as a result the company, with the continued support of its banking syndicate, is now considering alternative strategies.

“These strategies include amongst other things refinancing, restructuring, and continuing discussions with interested parties.”

Hybrid holders took to investor forums to vent their frustration with the company.

Most had expected the sale of the agribusiness division and the car parts division to free the debt burden.

Tasmanian firm Ruralco had been the sole suitor for Elders agribusiness and had received the green light the Australian Competition and Consumer Commission.

It has a 12 per cent stake in Elders as it is.

Shareholders see three options for Elders: a buy-in from a third party, an Asian bidder for the agricultural business or the banks moving in and liquidating the company.

Hybrid holders will have to wait to see if they’ll get their money back.