Elders ‘yes’ to restructure

Press, 28 July 1987, Page 27

Elders ‘yes’ to restructure

NZPA-AAP Melbourne Elders IXL, Ltd, directors said they have agreed to the principles of the restructuring proposals by AFP Investment Corp, Ltd, and will create four new public companies — the Elders Brewing, Finance and Agribusiness groups and the company that holds Elders’ BHP shares.

The Brewing, Finance and Agribusiness companies will be partly owned subsidiaries of Elders. Elders’ interest in the company owning the BHP shares will be less than 50 per cent. Elders Brewing will include Carlton and United Breweries in Australia, Courage in the U.K. and Carling O’Keefe in Canada with Peter Bartels as chief executive. Elders Finance will be the current Finance group with Ken Jarrett as chief executive. Elders Agribusiness, made up of the Pastoral and International Groups, will have Michael Nugent as chief executive. Each company will have a separate board with John Elliott as chair-

man of each. No changes are envisaged to Elders Resources. Geoff Lord continues as chief executive. The proposal for the company holding Elders’ BHP shares will be consistent with the obligations under the standstill agreement reached with BHP last year. Elders said the proposals will benefit all shareholders through a more efficient structure which will increase returns to shareholders, the ability to more easily value the component business assets of the company and therefore their aggregate value, and the ability of the shareholders to vary their investment between the various businesses of Elders. It said it is favourably disposed to the conditions of the AFP option agreements over Elders shares owned by Goodman Fielder and SA Brewing provided a satisfactory reconstruction is undertaken. Such disposal would increase the cash flow and earnings to Elders IXL, the board said.

But Elders said the decision to proceed with restructuring has not been finalised because there are several technical details to be determined before the board can decide to proceed with the proposals. It will also consider AFP’s proposal to give senior management, particularly Elders’ chairman John Elliott, in-

creased equity participation in Elders IXL through a portion of the options over Elders IXL shares it has secured from Goodmans and SA Brewing. This will be dependent on Elliott agreeing to continue as Elders’ executive chairman for at least three years. A further statement is not expected for several weeks.