Disposal
LONDON-(BUSINESS WIRE)-1 May 2002-
Completion of Western Sugar sale by Tate & Lyle
Tate & Lyle PLC ('Tate & Lyle') announces that it has today signed and
completed the sale of Western Sugar Company ('Western') to the Rocky
Mountain Sugar Growers Co-operative ('RMSGC'). The effective date for
the transaction is 31 March 2002.
The consideration is US$85 million (£58 million), subject to working
capital adjustments. In addition, liability for the repayment of
Western's inventory financing programme from the Commodity Credit
Corporation, US$100 million (£69 million) as at 31 March 2002, has
been assumed by RMSGC. The profit before tax on disposal is zero.
A total of US$24 million (£16 million) has been received in cash. The
balance of the consideration of US$61 million (£42 million) is secured
by a first lien over the non-working capital assets of Western and
will be payable over a maximum of five years as follows.
- A five-year loan of US$57m (£39 million) bearing interest at 10%
per annum will be redeemable in annual instalments commencing
January 2003, completing with a balloon payment in January 2007 of
a maximum of US$34 million.
- A loan of US$4m (£3 million) bearing interest at 10% per annum
will be redeemable in three equal annual instalments commencing in
January 2003.
Proceeds of the sale will be used to reduce Group debt.
Included in the sale are Western's six beet factories in Nebraska,
Wyoming, Colorado and Montana. The value at 31 March 2001 of Western's
net assets was US$92million (£65 million). Losses before interest and
exceptional items attributable to these net assets in the 12 months to
31 March 2001 amounted to US$5 million (£3.6 million). Losses before
interest in the 6 months to 30 September 2001 amounted to US$2 million
(£1.3 million).
Larry Pillard, Chief Executive, said:
`This disposal marks another very important step in the repositioning
of the Group. Three years ago we identified that 25% of our assets
were not performing up to our expectations and this sale completes the
disposal of those assets (the others being Domino Sugar sold in
November 2001 and Bundaberg Sugar sold in July 2000).
Tate & Lyle is now well placed as a world leader in carbohydrate
ingredients. Amylum in Europe and Staley in the Americas comprise a
global cereal sweetener and speciality starch company, where
management are confident of the long term growth prospects. Our sugar
businesses support this growth with their profitability and strong
cash generation.'
Short Name: Tate & Lyle PLC
Category Code: DIS
Sequence Number: 00000092
Time of Receipt (in Greenwich Mean Time): 20020430T222251+0100
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