Tate & Lyle PLC (“Tate & Lyle”) announces completion of the sale of Tate & Lyle North American Sugars Inc., trading as Domino Sugar (“Domino”), to an investment group led by Alfonso and J. Pepe Fanjul on 5 November 2001.
The maximum consideration will be US$185 million (£127 million) which includes a conditional earnout of up to US$20 million (£14 million) payable over 4 years from date of signing. The consideration in respect of fixed assets is unchanged from the announcement dated 26 July 2001(all variances relate to levels of working capital) and no further write down is required.
The sum of US$125 million (£86 million) has been received and is subject to an upward adjustment for closing working capital balances. The adjustment of approximately $15million (£9million) will be payable to Tate & Lyle in three instalments of $5million each in June 2002, June 2003 and December 2004.
The balance of US$25 million (£17 million) is funded by an interest bearing subordinated 10 year loan note issued by the purchaser. Of this, US$13 million (£9 million) will be redeemable in annual instalments commencing 42 months from the completion date with the balance of US$12 million (£8 million) redeemable 120 months from the completion date.
The conditional earnout of US$ 20 million is calculated based on sugar and energy prices (this amount has reduced from $25 million previously announced due to changes in the expected closing working capital levels).
As previously announced, included in the sale are Domino cane sugar refineries at Baltimore, Arabi (Chalmette, Louisiana), and Brooklyn; and the Allen Sugar Company, a distributor in Cleveland. The value at 31 March 2001 of Domino’s net assets adjusted to reflect the terms of the transaction, was US$180 million (£127 million). Losses before interest attributable to these net assets in the 12 months to March 2001 amounted to US$25 million (£17 million).
Larry Pillard, Chief Executive, said: ‘This disposal is an important milestone for the Company, once more demonstrating our commitment to deliver our strategy of only retaining those assets that we believe will produce acceptable returns for our shareholders.
Following this and other disposals, our work continues to integrate Amylum and Staley and to transform Tate & Lyle into a global carbohydrate based ingredients business.
I would like to thank all of our employees at Domino for their contribution to the business, especially during the disposal process.’
Schroder Salomon Smith Barney, a member of Citigroup, advised Tate & Lyle on this transaction.
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About Tate & Lyle:
Tate & Lyle is a world leader in ingredient solutions for healthier food and beverages. Supported by our 160-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 every day.
Through our expertise in sweetening, mouthfeel and fortification, we develop solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture and stability in categories including beverages, dairy, bakery, soups, sauces and dressings.
We have more than 3,500 employees working in around 60 locations across 39 countries. Tate & Lyle's purpose is Transforming Lives Through the Science of Food and through 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. In the year to 31 March 2022, Tate & Lyle revenue from continuing operations totalled £1.4 billion. For more information, please visit https://www.tateandlyle.com or follow Tate & Lyle on Twitter, Linkedin or Facebook.