Shares in Elders bounced more than 10% after the debt-laden Australian agribusiness group revealed a plan with its lenders, involving the loss of one-in-10 jobs, to secure financing until the end of next year.
Elders, which sold its Futuris car parts business last month to cut net borrowing to Aus$272m, eased concerns over its future by revealing it had agreed terms on up to Aus$414m in financial leeway from its banks through the likes of lending facilities and debtor securitisation.
The package is "appropriately structured to service the forecast requirements of the business through to December 2014", said Elders, which some investors had expected to seek an injection of equity capital to prop up its balance sheet.
The group revealed there had been "proactive interest from various parties regarding a recapitalisation", although it had prioritised for now agreeing a deal with banks.
However, the bank support has required some strictures in return from the company, which said it was to complete its exit from forestry, sell down its stake in an insurance joint venture with QBE and cut 10% of its staff, equivalent to about 150 posts.
'Sound and sustainable'
The staff cuts, and the closure of a "small number" of branch offices, are part of a drive to cut further Elders' annual operating costs, by more than Aus$25m from April 2014
The group - which has announced fourth successive annual losses, totalling more than Aus$400m - has already undertaken considerable efforts to cut costs, announcing a Aus$22.5m charge for restructuring and redundancy last year.
However, Elders said that the fresh restructuring plan had provided the group with "a sound and sustainable food".
The group's focus was on "completing the reorganisation of Elders as a pure agribusiness, with a sustainable capital structure and operations.
"The plan announced today delivers that outcome."
The group, one of Australia's oldest companies, flagged some improvements in the country's agribusiness markets, with sales of fertilizer and agrichemicals recovering "after a very poor first half to the year".
Turnover from property sales "continues to accelerate off a low base", whilst rising wool prices "are underpinning solid performance in wool brokering and also supporting increased sheep trading activity amongst producers".
In the company's important cattle operations, the outlook for global trading in live animals had improved after a "slower" first half, "with firm demand for shipments now coming forward in both long haul breeder cattle markets and short haul feeder cattle markets" in Elders' 2014 financial year, which starts next month.
"Beef sales volumes in Asia, particularly China, are remaining strong and are also contributing to a renewed positive outlook in the Australian feedlot sector."
Nonetheless, the group said it was to report a further loss in earnings, of Aus$32m-39m on an underlying basis, for the year to the end of this month, reflecting raised financing costs, and disappointing live cattle exports.
Analysts have forecast earnings of Aus$3.70m for the year.
However, with the group's future more secure, investors sent Elders shares up 10.5% to Aus$0.105 in Sydney.
The shares, which hit Aus$28.30 in June 2007, in May this year hit an all-time low of Aus$0.057.