ASX decision time for SunRice, but will shareholders vote?

Drought distracts SunRice's ASX vote agenda, as busy farmers disengage


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Shareholders to decide on September 20 on plans to list SunRice’s B-class shares on the ASX

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Seemingly underwhelming levels of interest in next week’s SunRice vote on an Australian Securities Exchange listing are making some in the rice industry uneasy.

Shareholders decide on September 20 on plans to list SunRice’s B-class shares on the ASX, significantly easing restrictions on share ownership and potentially improving the company’s share price and access to outside capital.

The move would also pave the way for a planned $20 million to $30m capital raising to help fund SunRice’s growth strategy for the next five years.  

Industry officials said the relatively straightforward share restructure plan appeared generally well supported by growers and other share owners, but discussion and interest in the looming vote deadline had been surprisingly lacklustre.

SunRice directors are not making any predictions about the ASX vote, but the Ricegrowers’ Association of Australia is a little nervous drought and other more immediate crop distractions have left many people disengaged from the debate, or unprepared for next week’s annual general meeting ballot.

I’m wondering if a lot of growers have the paperwork still sitting on their desk at home, yet to be read, or proxy vote forms still to be filled in - Jeremy Morton, Rice Growers Association of Australia

Others suspect many shareholders simply assume the relevant resolutions will receive the required 75pc majority support from participating A-class (growers only) and B-class shareholders.

Voting deadlines

The mailing deadline has effectively already closed for proxy votes which must arrive in Sydney by 10.30am Tuesday (September 18).

However, votes can be submitted online until Tuesday morning, or at Thursday’s Jerilderie AGM.

The AGM includes a series of ballots for board directors, including confirmation of recent appointment, former CBH chief executive officer, Andy Crane.

The RGA, which supports SunRice shifting from the National Stock Exchange to the ASX, has urged all shareholders to make their votes count and not to assume a straightforward result.

“We think it’s in the industry’s best interests if the vote is supported, but the key thing is for everybody to make their intentions clear when critical decisions like this have to be made,” said RGA president, Jeremy Morton.

“We see this as a unique opportunity for shareholders to secure and influence the future success and sustainability of the Australian rice industry.

“It’s critical they fully understand the ASX proposal and what it means for SunRice and their own futures before deciding how to vote.”

However, after recent information meetings attracted varied and sometimes modest attendances, Mr Morton was unsure if many busy growers realised the ballot was so near.

“I think there’ll probably be a good AGM roll up of B-class shareholders and proxies, but I’m wondering if a lot of growers (A-class shareholders) have the paperwork still sitting on their desk at home, yet to be read, or proxy vote forms still to be filled in,” he said.

Focus on rice disrupted

“It’s been a very dry year and farmers are not so focused on rice crop issues at present – people certainly don’t seem to be coming forward to talk too much about SunRice.

“They do tend to be interested if they’ve got time to think about it, but it’s proving difficult to get people engaged in that discussion.”

Jeremy Morton

Jeremy Morton

The low levels of obvious interest are in stark contrast to the intense discussion and sentiment aired prior to the previous big voter decision for SunRice shareholders, the $610m takeover bid in 2011 by Spanish rice and pasta business, Ebro Foods.

That vote failed after only getting 67pc support from growers who were offered $50,000 by Ebro for each of their single A-class shares.

The special general meeting alone attracted about 600 shareholders and the lead up to the vote stirred considerable debate across NSW.

“People really engaged in the Ebro vote – it attracted about a 90pc voter response,” Mr Morton said.

“I’m a bit concerned next week’s participation rate could be just half that.”  

Given the significance of the outcome to SunRice and your own future I encourage you to vote - Laurie Arthur, SunRice

SunRice chairman, Laurie Arthur, said voting was not compulsory, but it was critical shareholders understood the ASX proposal, including how it supported the company’s growth strategy towards 2022 to lift paddy rice prices and shareholder returns.

“Given the significance of the outcome to SunRice and your own future I encourage you to vote,” he said in a call to shareholders.

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He also recommended an online proxy vote, given the delays involved in mailing proxy forms.

SunRice’s website has published step by step details of how to submit online votes and reminded anybody attending the AGM to take their shareholder registration or holder identification numbers, or proxy forms.

Directors for election

The AGM will include voting on new non-grower director candidate and agribusiness finance specialist, Luisa Catanzaro; the re-election of non-grower director, Ian Glasson; confirmation of Dr Crane’s recent appointment as an additional director; plus re-election of Rice Marketing Board representatives John Bradford, Gillian Kirkup and Ian Mason.

SunRice has 751 A-class shareholders and more than 2000 B-class shareholders (which include A-class shareholders) holding about 56.5m shares.

Current directors have been active during August and early September answering questions and promoting the ASX proposal at public meetings at local “shed meetings”, while a shareholder hotline has handled inquiries and feedback.

Not all of the feedback and meeting commentary at the meetings has supported the SunRice’s plans, with some shareholders suspicious about a potential risk to grower control of the company after an ASX listing.

RGA’s Mr Morton said while grower opinions always varied and the were no share performance certainties on the stock market, voting at the AGM needed to fully reflect the industry’s feelings on all resolutions.

“Just don’t assume your view is going to be what happens, especially if the voter response is not large.”

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