Australian rice producer SunRice is seeking feedback from growers and shareholders on a new proposed capital structure that could lead to a listing on the Australian Securities Exchange (ASX).
The potential new capital structure would include SunRice delisting from the National Stock Exchange and the creation of the SunRice Fund, which would be listed on the ASX.
"While the board believes this is a strong workable model that is in the best interests of the company, the feedback of our growers and shareholders will determine whether or not it proceeds to a shareholder vote," SunRice chairman Laurie Arthur said on Wednesday.
The SunRice board started a review of SunRice's capital structure more than two years ago with a view to strengthening and expanding the business in the face of increased consolidation and competition in the agricultural sector.
To do this, SunRice needs access to a larger pool of capital than can be expected to come from existing shareholders.
But the board is committed to ensuring that SunRice remains under grower control. Most growers are A-class shareholders.
Under the proposed new capital structure, A-class shareholders would retain control rights, and B-Class shareholders would retain economic rights.
Mr Arthur said the proposed new capital structure could enable SunRice to become a strong, independent, Australian-controlled food business of scale, without relinquishing grower shareholder control.
Securities in the SunRice Fund (SunRice B Securities) would be issued to existing B-class shareholders in exchange for their existing B-class shares on a one-for-one basis.
The B Securities would have the same economic rights as the old B-class shares, have the right to receive dividends, and could be bought and sold on the ASX by investors generally.
The SunRice board is holding meetings across the Riverina region in NSW over the first two weeks of March to enable growers and shareholders to consider the potential new capital structure and obtain their feedback.
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