The partial float will be pitched to investors on an earnings multiple of 17.7 times earnings, with an implied yield of 7.4 per cent, according to documents released on Friday.
It is the first time the 65-year-old farmer-owned co-operative has sought to raise capital through external investment.
Mr Helou said he was confident the implied yield would be enough to placate investors, who will hold no voting rights in the co-operative to protect its 100 per cent farmer ownership.
It is the first time the 65-year-old farmer-owned co-operative has sought to raise capital through external investment.
Mr Helou said he was confident the implied yield would be enough to placate investors, who will hold no voting rights in the co-operative to protect its 100 per cent farmer ownership.
Investors in the Murray Goulburn Unit Trust will be eligible to receive annual and half yearly distributions, which will be equivalent to dividends paid to the co-operative’s shareholders.
«We have got a great profit sharing matrix in place that aligns the interest of the supplier/farmer shareholder and the unit investor,» he said.
«It is centred around maximising the milk pool and sharing the dividends out of that. As a function of the growth of the milk pool there will be a higher distribution of dividend, therefore … hopefully, a higher capital appreciation of yield value.»
«We have got a great profit sharing matrix in place that aligns the interest of the supplier/farmer shareholder and the unit investor,» he said.
«It is centred around maximising the milk pool and sharing the dividends out of that. As a function of the growth of the milk pool there will be a higher distribution of dividend, therefore … hopefully, a higher capital appreciation of yield value.»
REAFFIRMED FARMER PAYOUT
Mr Helou declined to comment on Fonterra’s decision but said Murray Goulburn had moved to insulate itself against global commodity price volatility.
In the past two years, he said, the co-operative has lessened its dependency on bulk dairy goods from 48 to 36 per cent of its product mix.
«Despite the collapse in dairy commodity markets our business continues to deliver as per our forecast at the beginning of the year. The reason for that is we are becoming less commodity-centric.
In the past two years, he said, the co-operative has lessened its dependency on bulk dairy goods from 48 to 36 per cent of its product mix.
«Despite the collapse in dairy commodity markets our business continues to deliver as per our forecast at the beginning of the year. The reason for that is we are becoming less commodity-centric.
«We are more dairy foods-centric, focusing on consumer and food service markets in Australia and internationally … which have a lot more stable income and profit streams attached to them.»
As foreshadowed by The Australian Financial Review’s Street Talk column, Murray Goulburn unveiled an indicative price range on Friday of $2.10 to $3.20 a unit. This implies a full year 2016 price-earnings multiple of 13.7 times to 17.7 times. It hopes to raise the $500 million by July this year.
Mr Helou was confident the co-operative would meet that deadline, saying the trust had attracted interest from not only local investors but ones from Asia and Europe who were keen for exposure to Australian dairy assets.
The cash injection will fund growth projects, such as new plants and plant upgrades, that underpin MG’s promise to deliver a higher milk price for its farmers.
As foreshadowed by The Australian Financial Review’s Street Talk column, Murray Goulburn unveiled an indicative price range on Friday of $2.10 to $3.20 a unit. This implies a full year 2016 price-earnings multiple of 13.7 times to 17.7 times. It hopes to raise the $500 million by July this year.
Mr Helou was confident the co-operative would meet that deadline, saying the trust had attracted interest from not only local investors but ones from Asia and Europe who were keen for exposure to Australian dairy assets.
The cash injection will fund growth projects, such as new plants and plant upgrades, that underpin MG’s promise to deliver a higher milk price for its farmers.
«The formation of the MG Unit Trust … will allow MG to complete planned investments in world-leading manufacturing capability and achieve increased market reach,» Mr Helou said, adding the co-operative’s Devondale brand was now the third biggest dairy importer into China.
The «Friends of Murray Goulburn Offer» will be open until June 9. Macquarie is lead manager is on the float.
The «Friends of Murray Goulburn Offer» will be open until June 9. Macquarie is lead manager is on the float.
Source: AFRWeekend
