Great Southern placed in trading halt

Agribusiness manager Great Southern has been granted a trading halt, following a request from the company yesterday.

In a letter to the Australian Securities Exchange (ASX), Great Southern made the request for a trading halt “pending an announcement in relation to its [Managed Investment Schemes (MIS)] Sales Program and working capital requirements”.

“We request the trading halt be put in place until the company is in a position to make an announcement, which it expects to be before market open on Monday May 11, 2009,” the letter said.

The ASX issued a release on the same day of the application, announcing that Great Southern will be placed in pre-open, pending release of the company’s announcement.

In February this year, Great Southern reported a 24 per cent fall in sales of their MISs, which managing director Cameron Rhodes had attributed partly to “uncertainties in the MIS sector created by Government and the Australian Taxation Office”.

Another factor was “deteriorating economic conditions on bad debts and provisioning in the MIS sales peak late last financial year when sales are at their peak”, Rhodes said at the time.

“This underlines the fact that Great Southern needs to reduce its reliance on MIS sales to generate the revenues required to service the higher operating cost and higher gearing the business currently carries.”

Rhodes added that the company was exploring a range of alternative options to meet its future funding needs, including the sale of assets.