(Adds CEO comment, details on spinoff, background)
April 4 (Reuters) - Australia's GrainCorp Ltd (GNC) on Thursday said it plans to spin off its global malting business and list it on the country's stock exchange.
The new company, dubbed MaltCo, will consist of GrainCorp's malting and craft brewing distribution business, Australia's biggest listed bulk grain handler said in a statement.
“Our Portfolio Review made clear that these businesses have different characteristics and would benefit from operating separately," GrainCorp Chief Executive Officer Mark Palmquist, said.
If the separation goes through, the company's shareholders will receive MaltCo shares in proportion to their shareholdings in GrainCorp, while also retaining their GrainCorp shares.
The spinoff would deliver cost savings of about A$20 million ($14.23 million) a year to the New GrainCorp.
The announcement comes amid a drought that has wilted crops across Australia's east coast, limiting the firm's ability to earn revenue from international grain trading.
New GrainCorp is considering a variety of options to reduce cash flow volatility related to grain harvest volumes, the company said.
In December, GrainCorp received a A$2.38 billion buyout proposal from asset manager Long-Term Asset Partners Pty.
The company said it is in talks with parities that are interested in buying parts of its portfolio, including Long-Term Asset Partners.
($1 = 1.4055 Australian dollars)
News: GNC UPDATE 1-Australia's GrainCorp to spin off global malting business
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