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BRIEF-Graincorp Ltd Enters 10-Year Contract To Manage Eastern Australian Grain Production Risk

Published 07/06/2019, 09:14 am
Updated 07/06/2019, 09:20 am
BRIEF-Graincorp Ltd Enters 10-Year Contract To Manage Eastern Australian Grain Production Risk
GNC
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June 7 (Reuters) - Graincorp Ltd GNC.AX :

* ENTERS INTO 10 YEAR CONTRACT TO MANAGE EASTERN AUSTRALIAN GRAIN PRODUCTION RISK

* CONTRACT WILL TAKE EFFECT FROM 2019-20 FINANCIAL YEAR.

* SUBJECT TO AN AGGREGATE NET LIMIT OF PRODUCTION PAYMENTS TO EITHER GRAINCORP OR CONTRACT COUNTERPARTY OF AUD$270 MILLION OVER 10 YEAR TERM

* EXCLUDING PRODUCTION PAYMENTS, TOTAL PRE-TAX ANNUAL COST OF CONTRACT TO GRAINCORP IS EXPECTED TO BE LESS THAN AUD$10 MILLION

* CONTRACT IS NOT SUBJECT TO A RIGHT OF TERMINATION IN EVENT OF A CHANGE OF CONTROL OF GRAINCORP

* DURING TERM PAYMENT OF $15/TONNE WILL BE MADE FOR EACH TONNE OF ACTUAL EAST COAST OF AUSTRALIA WINTER CROP PRODUCTION IN ANY GIVEN YEAR

* CONTRACT COUNTERPARTY IS WHITE ROCK INSURANCE (SAC) LTD

* FIXED PAYMENT OF AUD$15 PER TONNE WILL BE MADE IN ANY GIVEN YEAR WHICH IS BELOW AN AGREED LOWER PRODUCTION THRESHOLD OF 15.3 MILLION TONNES

* FIXED PAYMENT OF AUD$15 PER TONNE WILL BE MADE IN ANY GIVEN YEAR WHICH IS ABOVE AN AGREED UPPER PRODUCTION THRESHOLD OF 19.3 MILLION TONNES

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