Coote Industrial to pay Elph $6.5m

Coote Industrial will be forced to pay Elph $6.5 million after the takeover bidder exercised its put option to sell its stake in Coote subsidiary, Greentrains.

In a brief statement this afternoon, Coote said it had received notice from Elph's parent company, Elphinstone Holdings, in relation to its put option over 19.8 per cent of the issued shares in Greentrains.

Last year Greentrains, which had owed Coote $75 million, scored equity deals with Elphinstone and Orange Grove Brickworks, which ended with a 16.35 per cent interest.

Coote was the major shareholder of Greentrains with a 61.07 per cent interest.

In addition, Coote and Elphinstone had entered into a put option arrangement which allowed Elphinstone to sell its shareholding in Greentrains to Coote.

Today, Coote said it is now required to pay Elphinstone $6.5 million within 20 business days.

Coote is currently fighting a proportional takeover bid by Elph, which is the private company of Victorian and Tasmanian Caterpillar dealer, Dale Elphinstone.

Coote has recommended shareholders reject the offer of 26 cents cash for each share. The bid is for 35 per cent of Coote's issued capital.

Yesterday, Coote announced it had executed an agreement with its lender, Commonwealth Bank of Australia, to extend its current facilities until February 28 2011.

*** The story has been corrected since it was first uploaded ***