Elders rattles tin for $57 million

Elders has wasted no time in carrying out a capital raising days after disposing of the last of its non-core assets held for sale.

The 175-year-old agribusiness entered a trading halt yesterday and has asked brokers to raise about $57 million.

Elders is expected to use much of the proceeds to reduce its debt burden.

Elders last week sold its stake in logistics provider AWH to container terminal operator DP World Australia for $30 million, plus half the cash held by AWH. The deal followed the sale of the Charlton Feedlot for $10.2 million and Elders' New Zealand division in July.

Elders shares will remain in a trading halt until Monday while Bell Potter and Morgans carry out the capital raising.

It is understood the two-pronged raising comprises a placement of 68.3 million shares, to generate $10.2 million, followed by a three-for-five non- renounceable entitlement offer to contribute $47 million.

Both the placement and the entitlement offer have been priced at 15¢ a share.

Elders did not comment beyond a statement to the stock exchange confirming it was undertaking a capital raising.

Chief executive Mark Allison has targeted term debt in carrying out a plan to strip back Elders to a pure-play agribusiness.

In its half-year results to March 31, Elders reported net term debt of $118 million. The subsequent asset sales and the capital raising could all but cancel that out.

Other issues remaining include the $123 million in self- liquidating borrowings listed in the mid-year report and how Elders eventually resolves the big number of hybrid shares in the company.

Elders has survived after cutting its debt by about $1.2 billion since October 2008, with much of the heavy lifting done by former chief executive Malcolm Jackman.

Speaking before a meeting of the four-man board in Bunbury late last month, Mr Allison said Elders was close to securing a new finance deal.

Elders shares last traded at 21¢.