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Ballance Buys Back 20% Of Shareholding For $48m

Ballance Buys Back 20% Of Shareholding For $48 Million

Statement made by David Graham, Chairman, Ballance Agri-Nutrients

Ballance Agri-Nutrients Co-operative Limited, is to purchase for $48 million the 20% shareholding of subsidiary Ballance Agri-Nutrients Limited held by international fertiliser company Yara Asia Pte, formerly known as Norsk Hydro.

Ballance Agri-Nutrients Limited will then become a fully owned subsidiary of the co-operative company.

The purchase is by mutual agreement, and is the final step in a 5-year restructuring of Ballance aimed at establishing it as a nationally operating farmer cooperative specialising in agricultural nutrients and knowledge transfer to farmers.

Yara has been an extremely supportive shareholder, and has worked with us in the accomplishment of our long-term aim.

For Ballance’s farmer shareholders the buyback represents a double benefit. They will receive the full benefit of the cooperative’s financial performance, while Yara has agreed to continue to provide us access to specialty fertilisers along with its world-leading intellectual property and proprietory research.

The purchase price will be met from a combination of internal funding and lines of bank credit. Following completion of the transaction the cooperative will retain a sound balance sheet with our equity ratio being in the region of 56%.

Over the past 5 years Ballance and our shareholder customers have benefited greatly from the Yara relationship, especially from their willingness to share with us their technology, commercial expertise and international relationships. They have contributed significantly to the growth of the know how we have been able to transfer to farmers. This will not change given our ongoing knowledge sharing arrangement.

The restructured Ballance is now even more strongly placed to meet the challenges of assisting farmers to meet their responsibilities under sustainable farming through knowledge transfer, while at the same time assisting them by controlling 100% of the profit margin.

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