31/08/2009 - 09:12

Elders sells ITC Timber for $100m

31/08/2009 - 09:12

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Rural services provider Elders is to conduct a capital raising as part of a refinancing and recapitalisation of the company as it sells subsidiary, ITC Timber, to Gunns for $100 million.

Rural services provider Elders is to conduct a capital raising as part of a refinancing and recapitalisation of the company as it sells subsidiary, ITC Timber, to Gunns for $100 million.

Elders requested a trading halt in its shares on the Australian stock exchange today to allow the process to take place.

The move comes as timber company Gunns announced that it was acquiring an Elders subsidiary, ITC Timber, for an enterprise value of $100 million.

Gunns also has gone into a trading halt while it conducts a $145 million capital raising to fund the acquisition.

"Elders Limited has requested a trading halt in its securities pending finalisation of the terms of a comprehensive recapitalisation and refinancing of the Company," Elders said in a letter to the Australian stock exchange.

"The recapitalisation and refinancing, together with asset sales announced today or in recent months, will provide Elders with the strong and sustainable balance sheet with which it can pursue its strategy to be Australia's leading rural services company."

Elders announced on July 31 the sale of its insurance operations to QBE Insurance for $270 million.

As part of that deal, QBE is to subscribe to $45 million in Elders shares under the recapitalisation about to take place.

When the market closed on Friday, Elders shares were trading at 39 cents.

 

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