Elders announces an annual loss of $415.4 million and says it will raise up to $550 million through a share raising.
Rural services provider Elders says it will raise as much as $550 million through the issue of new shares but the restructuring of a separate debt package means no dividends will be paid until 2012.
Elders also announced an annual loss after tax and minorities of $415.4 million.
The result included non-recurring items after tax of $388.5 million arising from a restructuring of the group and effect of market conditions on asset valuations.
The underlying loss after tax from continuing operations was $26.9 million, down 132 per cent on the prior year.
Elders said underlying results were affected by market volatility and buyer uncertainty across all divisions, with prices, margins and volumes all substantially lower than in the 2008 financial year.
In a statement, Elders said net proceeds from the equity raising and asset sales previously announced would be used to repay debt and recapitalise Elders' balance sheet.
Elders said it had completed a $400 million conditional placement at 15 cents per share, which had received strong support from existing institutions and new investors.
Elders will seek to raise another $150 million via a share purchase plan, also at 15 cents per share, that opens on September 14.
It also said that it had received commitments from its lenders to restructure its debt funding, with the bulk of the term debt on a three-year term.
The refinancing is subject to certain conditions, including entry into definitive documentation.
Under the debt package, dividends on ordinary shares cannot be paid until after March 31, 2012 and upon satisfaction of several conditions.
Distributions to hybrid investors have been suspended for two years.
Elders shares have been in a trading halt since September 1 and last traded at 39 cents.
Both the conditional placement and share purchase plan are conditional upon shareholder approval at an extraordinary general meeting to be held on October 15.
Elders also said on Friday that it expected to realise gross proceeds of more than $700 million from asset sales by the end of the 2009 calendar year.
Proforma net debt was expected to fall from $997 million, as at June 30, 2009, to about $200 million after the asset sales and equity raising.
"The recapitalisation and refinancing will secure our future, providing us with the strong balance sheet required to achieve our near-term and longer-term objectives," Elders chief executive Malcolm Jackman said.
"Completion of the equity raising will provide the capital injection necessary to secure the longer-term financing we have been seeking, thereby removing the uncertainty which has weighed on our business over the past 12 months."
QBE Insurance Group is to subscribe for $55 million worth of new shares as part of the conditional placement, making QBE a key cornerstone investor in Elders, with a shareholding of about 8.2 to 9.2 per cent.
The company's 2010 financial year would start on October 1, 2009 and finish on September 30, 2010.
Elders said it had reviewed its financial performance outlook during the course of its refinancing, with the help independent accountants.
The review had confirmed the group's expectation of a strong recovery in the generation of earnings before interest and tax (EBIT) in the key rural services division as well as improved earning outcomes from the group's automotive and ITC forestry divisions.
"Financial projections made at this stage are necessarily subject to change given the variation that can arise from factors such as seasonal and economic conditions and MIS (managed investment scheme) sales over the next 13 months," the company said.
"Subject to these factors and as set out in the prospectus, Elders expects underlying EBIT to turn around in 2010 from $16.8 million to $84.2 million.
"Underlying NPAT (net profit after tax) from continuing operations is forecast to be $55.7 million."
AAP
