Graincorp sign new contract to cut drought cash issues

Company News

by Rachael Jones

GrainCorp (ASX:GNC) has moved forward to manage the risk associated with the volatility of the eastern winter grain production by executing a 10 year agreement contract.

This contract will reduce cash flow volatility, particularly in periods of severe drought.

During the term, a fixed payment of $15 per tonne will be made for each tonne of actual east coast of Australia winter crop production in any given year which is below an agreed lower production threshold of 15.3 million tonnes.

Shares in GrainCorp (ASX:GNC) closed -0.77 per cent lower at $7.71 yesterday.