MG Unit Trust Announced An Update On Its Delisting Proposal

  • Apr 01, 2019 AEDT
  • Team Kalkine
MG Unit Trust Announced An Update On Its Delisting Proposal

MG Unit Trust (ASX: MGC), established in 2015 and based in Southbank, Australia is a special purpose funding vehicle which provides its unitholders, with economic exposure to the business of Murray Goulburn Co-operative Co. Limited, which owns MG Responsible Entity Limited, the trustee of the MG Unit Trust.

On April 1st, 2019, Murray Goulburn Co-operative Co. Limited informed that it has now successfully placed its insurance program from end March 2019, and confirmed that the cost of insurance would not be significantly higher if the MG Unit Trust were to remain listed on the ASX.

As per the trailing announcements, Murray Goulburn had been negotiating its annual insurance premiums for quite some time. Besides, as per the enquiries of the insurance market which commenced in October 2018, it was expected that Murray Goulburn could considerably reduce its insurance premiums if the MG Unit Trust were delisted from the ASX.

The company’s Board has also decided not to convene a meeting of the unitholders, to seek approval for the proposed delisting of the MG Unit Trust at this point of time.

For the half-year ended December 31st, 2018, the Group reported a reduction in the net loss after income tax to $ 17.6 million from $ 27.5 million recorded, in the prior corresponding period (PCP) ended December 31st, 2017. At the end of the period, the net assets were valued at around $ 271.27 million including net cash and cash equivalents of $ 195.48 million.

The operating activities generated net cash outflows of $2.02 million, due to significant payments of around $5.56 million to suppliers and employees. Meanwhile, there were massive cash outflows of approximately $24.57 million from investing activities, including $14. 86 million of payment for deposits, and around $9.7 million of payments to Saputo to finalise the sale of operating assets and liabilities. There were no financing activities undertaken during the period.

On May 1st, 2018 Murray Goulburn sold its operating assets and liabilities to Saputo Dairy Australia Pty Ltd. As per the terms of the deal, the Group agreed to retain liabilities associated with the Australian Competition and Consumer Commission (ACCC) proceeding and Webster unitholder class action and any related claim or dispute. The proceeds from the transaction have been and will be utilised to repay the Group’s debt obligations, as working capital fund and to fund any potential obligations arising from the Retained Litigation, to return capital (if any) to Shareholders and Unitholders, and to wind up the Group companies.

MG Unit Trust has a current market capitalisation of around AUD 66.16 million with ~ 216.91 million outstanding shares. On April 1st, 2019, the MCG stock price closed the market trading at AUD 0.307, up 0.66%, reflecting an intra-day gain of AUD 0.002 and is quite close to the 52-weeks high of AUD 0.345. The stock performance has been improving since the beginning of February 2019, and MGC has generated a positive YTD return of 10.91% so far.


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