UPDATE 1-Australia's AWB says no plans for rights issue

(Adds details)

SYDNEY, May 20 (Reuters) - Australian wheat exporter AWB Ltd (AWB.AX) has no plans for a rights issue and still sees synergies from a merger with rival ABB Grain Ltd (ABB.AX), it said on Wednesday.

Canada's Viterra Inc (VT.TO) has agreed to buy ABB for $1.2 billion [ID:nNSYD33174], and analysts expect more consolidation in the Australian grain market following deregulation last year, when AWB lost its monopoly over wheat exports.

"We still have a lot of room around our balance sheet," AWB Managing Director Gordon Davis told reporters. "Our operations at this time are not restrained for capital."

"Australian and international agriculture remains an attractive industry segment and AWB is well positioned to capitalise on agribusiness opportunities," Davis said.

A capital raising by rival GrainCorp Ltd (GNC.AX) earlier this week had sparked speculation that AWB would alos look for funds, and sent its shares tumbling.

AWB reported a 62 percent drop in first-half profit to A$8.5 million ($6.6 million) from A$22.3 million in the same period last year, in line with its earlier forecast. It expects a better performance in its second half.

It has cut its earnings forecasts twice this year.

AWB shares are down about 58 percent so far in 2009, far underperforming a 2.6 percent rise in the benchmark S&P/ASX 200 index .AXJO.

AWB lost its long-held monopoly on wheat exporting in 2006, after from a judicial inquiry that found the company paid $222 million in kickbacks to the former government of Saddam Hussein in Iraq in return for wheat sales. (Reporting by James Regan)