01/02/2010 - 11:23

AACL Holdings opens $11m IPO

01/02/2010 - 11:23

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Perth-headquartered agribusiness AACL Holdings expects to list on the Australian Securities Exchange later this month as it opens its $11 million initial public offer.

AACL Holdings opens $11m IPO

Perth-headquartered agribusiness AACL Holdings expects to list on the Australian Securities Exchange later this month as it opens its $11 million initial public offer.

AACL, founded in 1997, assists Australian grain farmers to better manage their production risks and obtain access to investor funds in line with other major Australian industries. Its Grain Co-Production (GCP) product forges partnerships between investors and farmers to grow large scale broadacre crops such as wheat, barley and canola.

The company stressed it was not a corporate farmer. The farmers provide land, equipment and expertise with AACL providing the capital to grow the crops. Farmers receive guaranteed cash-flow and substantial income protection against adverse events.

As well as GCP, AACL markets grain and offers carbon capture programs. On the latter AACL's parent company Broadacre Asset Management Ltd owns 30 per cent of Carbon Conscious, a Perth-based biosequestration company.

The AACL prospectus offers up to 44 million shares at 25 cents each and if subscribed in full the company will have a total of 72 million shares on issue and a market capitalisation of $18 million. The offer is expected to close on February 16, with the ASX listing due in late February.

Broadacre Asset Management is converting $4 million of existing debt to equity at the IPO price. This will make AACL debt-free when it lists on the ASX later this month. Funds raised from the IPO will also be used for working capital and funding the continued rapid growth of the GCP.

Managing director and a founder of AACL, Andrew McBain, said the IPO fundraising gives investors an opportunity to get on board a fast growing and unique business model.

"We have rapidly expanded GCP from 20,000 tonnes of wheat in 2005 to a point where we have contracted 467,000 tonnes of various grains in 2009," said Mr McBain. "In 2010 we are expecting to contract production of 610,000 tonnes of grain. This makes AACL the largest grain production enterprise in Australia."

"AACL's GCP has no direct competition and currently has market penetration of less than 2 per cent of Australia's average annual wheat, barley and canola production of 30 million tonnes."

AACL's aim is to produce and manage 2 to 3 million tonnes or 10 per cent of the Australian crop by 2014.

Lead manager to the issue is Paterson Securities.

The company has an experienced management team with more than 40 staff and 235 farmers across Australia.

 

 

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