Agribusiness Elders went into a share trading halt Thursday morning as it prepares to announce a capital raising.
Elders did not reveal how much money it was raising from investors, but said it was undertaking a bookbuild.
“Elders requests an immediate trading halt as it proposes to announce a capital raising and is currently undertaking a bookbuild for the capital raising,” the company said in a letter to the stock exchange.
It expects its shares to remain in a trading halt until Monday at the latest.
The news comes after last week’s deal to sell its 50 per cent stake in logistics firm AWH Pty Ltd to DP World Australia for $30 million plus 50 per cent of AWH’s net cash.
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AWH operates warehouses and container handling operations in Western Australia, South Australia, Victoria, NSW and Queensland.
It was established to provide wool logistics services but has since diversified to handle other bulk or containerised products.
Elders said on Friday that AWH was a profitable business but was not considered to be one of the group’s core operations.
The proceeds of the sale will be used to reduce Elders’ debt.
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“This sale represents substantial completion of Elders’ program to sell non-core assets and reduce term debt,” Elders chief executive Mark Allison said in a statement.
Elders has been involved in a long process of selling non-core assets so it can concentrate on being a “pure” agribusiness.
The change in direction was further underlined eight days ago when Elders re-joined the Australian Wool Exchange Limited (AWEX).
Elders was a foundation member of the exchange in 1994.
The Exchange manages wool marketing arrangements in the Australian wool industry.
It represents the majority of first-hand wool traded in Australia each year and includes wool brokers, exporters, private treaty merchants, processor, wool producers and associates.
Shares were trading at 21 cents when the exchange closed Wednesday.
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