Vote set for SunRice ASX listing

The capital restructure plan involves an Australian Securities Exchange (ASX) listing of the SunRice Fund, which is intended to give the farmer-owned processor and marketer access to a deeper pool of equity capital than it currently has.

Chairman Laurie Arthur said the extra capital would fund new growth opportunities, manage business risk and develop greater resilience and balance sheet strength so SunRice could withstand future downturns in crop and economic conditions.

Similar to the listed fund models established by dairy companies Murray Goulburn and Fonterra, the capital restructure would keep grower control separated from the economic rights of SunRice.

"In line with this, if implemented the capital restructure will preserve the fundamental elements of the SunRice business that are critically important to us as grower shareholders," Mr Arthur said.

The restructure will not go ahead unless it receives a 75 per cent majority vote from both A- and B-class shareholders.

Mr Arthur thanked shareholders and growers for their time and input as the board had finalised the review process in recent months, urging them to attend pre-vote information roadshows planned to be held in the Riverina from November 16, or to join online webinar sessions, or a Sydney meeting on November 20.

"We have invested significant time and resources to ensure the proposed new structure protects and delivers enduring grower control for our A-class shareholders and the SunRice business," he said.

"From that base, we've been able to develop a unique structure involving the establishment of a new SunRice Fund that will change the way we fund SunRice's future growth and build an Australian-controlled food company of scale that can more effectively compete in global markets for the benefit of all growers and shareholders."

A restructure information booklet would be sent to all shareholders in due course, including an independent expert's report and detailed information about the capital restructure, including the advantages and disadvantages of the proposed new model.

It was important shareholders read this document in full and sought financial advice before voting.

"The board believes the capital restructure has potential to deliver a number of benefits for SunRice and our growers and shareholders," Mr Arthur said.

For A-class (grower-only shareholders), the restructure would ensure the company was better equipped to target new markets for Australian rice and optimise the paddy price for Riverina growers in good times and bad.

"For our B-class shareholders, it offers the potential to unlock greater value for their investment in SunRice and provide greater flexibility for estate planning," he said.

"Given approximately 68 per cent of our B-class shares are held by A-class shareholders, many of our shareholders will benefit on both counts."

Mr Arthur said the SunRice board would continue to have a majority of grower directors and there would be no change to how paddy pricing or dividends were determined, protecting both sets of shareholders' interests.

Key features of the existing structure would continue, including A-class shareholders retaining the sole right to elect directors, change the constitution, or ultimately determine the outcome of any change of control transaction through a 75pc majority vote.

B-class shareholders would maintain their economic rights in SunRice, with a requirement to approve any transaction that changes their class rights.

"I've personally spoken to hundreds of our shareholders in the past few months and there is good understanding that we need to continue to change as a business, but the November information sessions will provide important context about how and why.

Prior to March a detailed restructure booklet will be finalised and reviewed by the Australian Securities and Investments Commission (ASIC) and distributed to shareholders.

SunRice will also receive the final input from other corporate and industry regulators.

Further information for growers and shareholders is available on the "Investor" section of the SunRice website www.sunrice.com.au or by phoning 1800 020 806.