ELDERS – FACILITATING A GENUINE TURNAROUND OF AN AUSTRALIAN ICON

PPB Advisory spent two years working closely with ASX listed Elders Limited to help successfully restructure, refinance and recapitalise the 175 year old company, staving off insolvency and repositioning itself in the Australian market with next to zero debt.

Today, Elders is in an excellent position and ready to rebuild its business:

  • share price rebound
  • recalibrated banking syndicate with strengthened relationships and facilities
  • strong financial position to support future growth.

When PPB Advisory was appointed as advisors in late 2012, Elders was struggling with over $400m in debt, an urgent funding request and three distinct and diverse business units which were all facing pressure:

  • rural services
  • auto manufacturing
  • forestry assets.

PPB Advisory demonstrated the depth and breadth of our experience, with engagements across our restructuring, corporate finance, forensics, agribusiness and corporate advisory teams to lead Elders through a successful turnaround program.

RESTRUCTURING AND AGRIBUSINESS ADVISORY

Working collaboratively with Elders’ banks, we assisted the group to obtain the funding injection in late 2012 and instigated a series of initiatives to enable the client to refocus on its primary business, rural services.

To minimise distraction and allow Elders to refocus on its core rural services business, PPB Advisory worked closely with Elders to

  • divest the automotive manufacturing business despite challenging industry conditions with the announcement by Ford and Holden of their plans to exit domestic manufacturing
  • exit forestry assets despite large cash outflows and legacy issues from previous forestry Managed Investment Schemes (MIS)
  • divest non-core operations in rural services
  • implement a restructuring of the rural services business.

ACCOUNTING  AND TECHNOLOGY RISK

When a $20m accounting abnormality was found in the live cattle trading division of Elders, our specialist forensic accounting team helped uncover discrepancies in Elders’ accounting policies and identify the source of the problems to help management implement controls and processes to mitigate future risks.

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