Agribusiness Elders will acquire up to $30 million of hybrid securities, on market, to help simplify its capital structure.
The hybrid securities were issued at $100 each in 2006.
But Elders has not paid a distribution on the hybrids since June 2009 because of economic and market conditions, and its financial position.
Consequently, the hybrids have lost value.
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Elders’ wholly-owned subsidiary, Elders Finance, will buy back around $30 million of hybrids at up to $80 each – a premium to the closing price of $74.30 on August 13.
The purchase of the hybrids will be funded from current year earnings.
“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,” Elders chief executive Mark Allison said.
Allison said Elders would have preferred to acquire the hybrids through an off-market offer but was prohibited from doing so under the Corporations Act.
Shares in Elders were 25 cents, or 6.63 per cent, higher at $4.02 at 1110 AEST.
