Miller Magazine Issue 109 / January 2019

44 NEWS MILLER / JANUARY 2019 $1.8 billion-bid for Australia’s GrainCorp Nibulon plans to build new port in Kherson region A group of Australian investors backed by Goldman Sachs Group Inc. offered $1.8 billion to take control of GrainCorp, Australia’s largest listed bulk grain handler. The offer comes as GrainCorp’s shares were trading near two-year lows amid a drought that’s slashed the amount of grain being delivered to its terminals this se- ason. A drought-ravaged east coast cropping landscape and higher energy costs shrivelled GrainCorp’s full-year balance sheet in 2017/18, with profit dropping 43.7 per cent to $70.5 million. Last month GrainCorp cut about 50 jobs in middle management and administrati- on on forecasts of a severely reduced summer harvest, with further cuts expected as a bleak 2019 looms. The newly formed asset manager, led by prominent businessman Tony Shepherd and Lance Hockridge, the former chief executive officer of rail freight company Aurizon Holdings Ltd., offered A$10.42 a share in cash. That’s 43 percent more than GrainCorp’s last closing price. GrainCorp, which is the biggest crop handler in eastern Australia and is also a significant supplier of malt, says it hasn’t formed a view on the price. It wants more information on the equity investors underpin- ning the bid. The Australian government had blocked a A$2.8 billion takeover of GrainCorp by U.S. agribu- siness giant Archer Daniels Midland Co in 2013 fol- lowing pressure from grain growers. Nibulon, one of the largest grain traders in Ukraine, plans to build a new port in Oleksandrivka (Kherson region) to bolster Ukrainian agricultural export capa- city, the company said in a statement. “This port is a great prospect for the development of the entire Kher- son region. This is an extremely difficult task and very large investments, but our company can do this only in five years,” CEO of the company Oleksiy Vadatursky said. According to him, Nibulon continues the imple- mentation of the investment program in Kherson regi- on. There are already two transshipment terminals of the company in the village of Kozatske and Hola Prys- tan, while next year the company plans to increase the capacity of the Hola Prystan transshipment terminal by 20,000 tons, as well as to expand the capacity of this enterprise for accepting rice. The company plans in the next two years to reo- rient almost all of its cargoes to the Dnipro River and transport by water up to 4 million tons of products per year, which will allow reducing the load on the roads. Nibulon cultivates 83,000 hectares of land. It exports agricultural products to more than 60 countries. The annual export volume exceeds 4.5 million tons. Australia’s largest listed bulk grain handler GrainCorp said it received $1.8 billion takeo- ver offer. The offer comes as a drought wilts crops across Australia’s east coast, limiting GrainCorp’s ability to earn revenue from international grain trading.