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.’
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About Tate & Lyle PLC:
Supported by our 165-year history of ingredient innovation, we partner with customers to provide consumers with healthier and tastier choices when they eat and drink. We are proud that millions of people around the world consume products containing our ingredients and solutions every day.
Through our leading expertise in sweetening, mouthfeel and fortification, we develop ingredients and solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture and stability to food and drink in categories including beverages, dairy, bakery, snacks, soups, sauces, and dressings.
Tate & Lyle recently acquired CP Kelco, a leading provider of pectin, speciality gums and other nature-based ingredients to create a leader in mouthfeel, significantly enhancing our solutions capabilities. Following this combination, we now have more than 5,000 employees working in around 75 locations in 39 countries, serving customers in more than 120 countries. Science, Solutions, Society is our brand promise and how we will achieve our purpose of Transforming Lives through the Science of Food. By living our purpose, we believe we can successfully grow our business and have a positive impact on society. We live our purpose in three ways, by supporting healthy living, building thriving communities and caring for our planet.
Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. For the year ended 31 March 2024, and on a pro forma basis which assumes for illustrative purposes that the combination with CP Kelco took place on 1 April 2023, revenue for the enlarged Tate & Lyle Group would have been £2.25 billion. For more information, please visit www.tateandlyle.com or follow Tate & Lyle on LinkedIn, X (Twitter), Facebook or YouTube
