Agribusiness Elders will cut more jobs and close some rural and regional branch offices as it finalises its restructure.
While the company would not put a figure on the number of jobs to go, it said it expected a staff cut of 10 per cent.
Its website states it has 5000 employees.
Elders said it has refinanced its debt and expected its net losses for 2012/13 to be between $32 million and $39 million.
The new finance agreement includes a mixture of term debt facilities of up to $144m, working capital and contingent facilities of up to $87m and a debtor securitisation facility of up to $183m, the company said in a stock market update today.
“The extension and renewal of Elders’ syndicated finance facilities underpins a comprehensive plan to reposition Elders as a pure agribusiness, focused on its branch network and trading operations operating within and from Australia and New Zealand,” the company said.
“The plan includes the now completed sale of Futuris Automotive; the final exit from its forestry business; and a partial sale of its equity holding in Futuris Automotive.
“The senior management teams across the agribusiness operations have developed a reorganisation plan and new business model focused on the core rural services and trading businesses.
“The reorganisation will be implemented before the end of this calendar year and the new business model is expected to reduce annualised operating costs by more than $25m, from April 2014.
“Given the substantial operating cost out initiatives undertaken by Elders over previous years, the reorganisation and new business model will involve reduction of about 10 per cent of employee numbers.
“A small number of rural and regional branch offices will be closed or consolidated into larger nearby branches to ensure sustainability of the network operations in the long-term.”
The company said the increase in expected losses arose from fewer live export shipments than forecast, reflecting weaker than anticipated demand, and increased interest and financing costs.
Elders Limited Managing Director Malcolm Jackman said the restructure has been a long and difficult process.
“In the coming weeks, we will have wound-down the vast majority of the forestry business, made final payments to managed investment scheme (MIS) investors and ‘killed’ the forestry cash burn,” Jackman said.
“Since we announced the wind down of Elders Forestry in October 2011 we have worked diligently to optimise the return to all stakeholders.
“Completion of the wind down is a remarkable achievement considering the total collapse of the MIS forestry sector in Australia over the last few years.”
“With syndicated finance facilities appropriately structured to meet our forecast requirements out to the end of 2014, and the sale of Futuris Automotive to Clearlake Capital Group now complete, Elders is in a good position to complete the re-organisation of its rural services business and to consolidate into a sustainable and profitable agribusiness.”
