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 No way out but AWB reforms: industry 

No way out but AWB reforms: industry

24/07/2008 12:27:00 PM
AWB shareholders have been told that they have no choice but to vote for the company's proposed constitutional reforms.

Independent grains analyst Malcolm Bartholomaeus told Farm Weekly that the AWB was the legacy wheat exporter which would set the future benchmark for the industry.

He said he would "certainly" be benchmarking other operations against the level that the AWB is able to set when he analyses the local grain market this harvest.

Mr Bartholomaeus said the AWB will need to be as competitive as possible by being allowed full access to working capital at least cost.

He said that meant access to equity capital (shareholder funds) and debt at low rates based on a high credit rating.

He backed that view in his Farm Weekly (July 15) column.

A similar, strongly worded sentiment was echoed by ProFarmer in its weekly newsletter earlier this month.

"We have no choice," Mr Bartholomaeus said.

"AWB must normalise its corporate structure by removing its dual class shareholding system.

"That move will open up the way to raise more equity finance, and the improved governance systems that should result, should improve the ability of AWB to secure a positive credit rating.

"I note that despite having to act in the best interests of all shareholders, there are four A-class elected directors who do not support the changes.

"Someone has to be wrong and someone has to be breaking the law by not acting in the best interests of all shareholders, or is not a particularly good director.

"Is it the B-class directors or the A-class directors?

"I guess we will be able to judge when we see the arguments for and against the changes."

Mr Bartholomaeus said the loss of the single desk meant the situation that required the original dual class system was no longer in place.

He said he could not see how growers would be disadvantaged by removing the A-class shares and having all the directors elected by B-class shareholders.

He foresaw issues "if we persist with our dual class shareholding", he said.

AWB managing director Gordon Davis said Mr Bartholomaeus' views summarised the key issues and the way forward for his company's constitutional reforms.

The news comes as WA grain growers, during a series of critical grower meetings across the WA Wheatbelt last week, voiced overwhelming support in favour of AWB's bid to amend its embattled constitution.

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Comments


B class shareholders have purchased shares in a company established using grower levies. Their investment was underwritten by grain growers funds. If growers are to be sacraficed for the sake of non grower shareholders there should be a free share issue to growers to compensate for their loss of return and initial investment.
Posted by bazza on 24/07/2008 2:33:17 PM
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27/08/2008 | IF farmers are wondering what the new look Senate will mean for them, they should just take a look at politics in NSW and the behind-closed-doors relationship between Labor and the Greens for a taste of what might be in store Federally.
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