Tate & Lyle PLC (“Tate & Lyle”) announces the sale of its international sugar trading operations to Bunge Limited (“Bunge”) for an undisclosed amount.
The disposal, which is conditional on anti-trust approval in a small number of countries, represents another step in delivering on Tate & Lyle’s strategy of reducing its exposure to volatile commodity markets.
As a first stage, the operations and the employees of the international sugar trading business will transfer to Bunge. The working capital in the business will remain with, and be collected and paid by, Tate & Lyle through to 31 March 2009 at which point it will be assumed by Bunge upon final completion of the transaction.
The disposal will allow Tate & Lyle Sugars to concentrate on its core sugar refining operations. In conjunction with the sale, the raw cane sugar sourcing team in the Group’s EU sugar refining operations is being strengthened to ensure it has the appropriate resources going forward to support and develop its key supplier relationships.
Iain Ferguson, Chief Executive of Tate & Lyle said:
“Our international sugar trading operation is a good business. However, the recent sale of our sugar businesses in the Americas and the restrictions on exports from our EU cane sugar refineries, which were implemented as part of the EU Sugar Regime reforms, have reduced the value of international sugar trading to Tate & Lyle. I would like to take this opportunity to thank our employees in this business for their commitment and hard work over the years and wish them every future success within the Bunge organization.”
The gross assets attributable to the business being sold had a value of £288 million at 31 March 2008; net operating assets had a value of £106 million at 31 March 2008 and related primarily to working capital. A small number of minority interests related to the sugar trading business are not included in the sale and will be addressed separately over the coming months in accordance with the related shareholders' agreements. The sale of the international sugar trading business and the anticipated disposal of the minority interests are together unlikely to generate a material profit or loss on disposal; the sale of some of the minority interests may occur in the 2010 financial year.
1. Tate & Lyle’s international sugar trading business made an operating profit of £2 million in the two months to 31 May 2008, an operating loss of £9 million in the year ended 31 March 2008, and an operating profit of £22 million in the year ended 31 March 2007.
2. The results of this business will be reclassified as discontinued operations. A restatement of Tate & Lyle’s accounts for the six months ended 31 September 2007 and for the year ended 31 March 2008 will be published on the Company’s website www.tateandlyle.com.
3. The sale excludes Tate & Lyle’s shareholding in its subsidiary in Israel, Tate & Lyle Gadot Manufacturing, and the minority interests in sugar facilities in Saudi Arabia, Egypt and Thailand.
4. Tate & Lyle’s Annual General Meeting will be held on 23 July 2008 on which day we will also publish our Interim Management Statement for the three months ended 30 June 2008.
