EXPORTER GrainCorp would look to unlock “significant value” by demerging its global malting business into two independent ASX-listed companies, chairman Graham Bradley says.
The two new entities would be known as MaltCo and New GrainCorp.
Following the proposed demerger, MaltCo would be the world’s fourth largest independent maltster with malting houses in the US, Canada, Australia, and the UK.
“The board believes that the demerger would unlock significant value for shareholders by establishing two unique and high quality ASX-listed agribusinesses with focused management teams able to pursue independent strategies and growth opportunities,” Mr Bradley said.
GrainCorp’s portfolio review made clear that these businesses have different characteristics and would benefit from operating separately.
According to GrainCorp, a demerger would provide both MaltCo and New GrainCorp with “increased flexibility to implement independent operating strategies and capital structures” and allow them to attract investors with different investment priorities.
The demerger is expected to be implemented by the end of 2019.