Completion of Western Sugar sale by Tate & Lyle

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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.’

About Tate & Lyle: 
Tate & Lyle is a global provider of solutions and ingredients for food, beverage and industrial markets.

Tate & Lyle operates through two global divisions, Food & Beverage Solutions and Primary Products, supported by the Innovation and Commercial Development and Global Operations teams. Food & Beverage Solutions is focused on growth by building leading positions globally in the categories of beverages, dairy, and soups, sauces and dressings. Primary Products is focused on delivering steady earnings and generating cash.

Food & Beverage Solutions consists of: Texturants, including speciality starches; Sweeteners, including low- and no-calorie sweeteners; and a Health and Wellness portfolio comprising mainly speciality fibres; and Stabilisers and Functional Systems, which are bespoke ingredient blends that ensure foods retain their structure.

Primary Products consists of high-volume sweeteners, industrial starches and fermentation products (primarily acidulants).  It also sells co-products from the corn milling process as animal nutrition.

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 2019, Tate & Lyle sales totalled £2.8 billion. For more information, please visit http://www.tateandlyle.com or follow Tate & Lyle on Twitter or Linkedin.