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GrainCorp demerges international malting business
Gilbert + Tobin has acted as legal adviser to GrainCorp on the demerger of its international malting business by way of scheme of arrangement and ASX listing.
Tony Zhang
Firms: Gilbert + Tobin (Graincorp)
Value: $100 million.
Area: Corporate advisory.
Key players: Lead corporate advisory partner John Williamson-Noble, who lead the transaction team was supported by corporate lawyers Chris Morse, David Konstantopoulos and Thomas Kannan.
Partner John Schembri and lawyers Erin Cartledge and Charley Xu from G+T’s banking + infrastructure team advised GrainCorp on the debt refinancing required to implement the demerger.
Partner Crispian Lynch and lawyers Alexandra Whitby, Joshua Ehrenfeld and Christine Harb from G+T’s disputes + investigations team advised on the court approval process for the scheme of arrangement.
Partner Amanda Hempel and lawyer Isabelle Wong from G+T’s real estate + projects team advised GrainCorp on the real property restructure and ongoing arrangements between GrainCorp and United Malt relating to real property.
Partner Melissa Fai and lawyer Clare Beardall from G+T’s technology + digital team advised on the post-demerger transitional services arrangements between GrainCorp and United Malt.
Deal significance: As a leading integrated Australian agribusiness, this was a significant transaction for GrainCorp, which was implemented by way of a scheme of arrangement (which required the approval of GrainCorp’s shareholders and the Federal Court of Australia), the ASX listing of United Malt, a capital reduction, an internal restructure and ongoing commercial arrangements between GrainCorp and United Malt.
Lead corporate advisory partner Mr Williamson-Noble, who lead the transaction team, noted that “this was one of only a handful of demergers from a listed company implemented by way of scheme of arrangement in recent years and speaks to G+T’s expertise that we had a major role on this transaction. We are delighted to have advised GrainCorp on such a significant transaction.”
As part of the demerger, eligible GrainCorp shareholders received shares in United Malt in proportion to their shareholding in GrainCorp. GrainCorp retained a minority ownership interest of 10 per cent of United Malt shares to provide GrainCorp additional balance sheet resources and financing flexibility.
Ineligible GrainCorp shareholders, and small GrainCorp shareholders that made voluntary elections, will have United Malt shares sold on the ASX on their behalf by a sales agent under a sale facility operated by GrainCorp as part of the demerger.
The demerger was unanimously recommended by the GrainCorp board, and Grant Samuel & Associates, the independent expert appointed by GrainCorp to review the proposed demerger, concluded that the demerger was in the best interests of GrainCorp shareholders.
GrainCorp shareholders voted overwhelmingly in favour of the demerger and related capital reduction at scheme and extraordinary general meetings held on Monday, 16 March. The Federal Court of Australia subsequently approved the scheme of arrangement to give effect to the demerger on Friday, 20 March.
The implementation of the demerger, which occurred on Wednesday, 1 April, has established two ASX-listed agribusinesses, well positioned to create future value for their shareholders.
United Malt is the world’s fourth-largest independent commercial maltster, serving brewers, distillers and other users of malt and craft ingredients. It is also a leading craft malt distributor in North America.
The demerger provided GrainCorp and United Malt with increased operating and strategic flexibility to drive long-term shareholder value and attract investors with different investment preferences.
