Last checked at 1 Jul 2010 07:00
TATE & LYLE TAKES MAJOR STEP TO FOCUS BUSINESS THROUGH SALE OF EU SUGAR OPERATIONS
Tate & Lyle PLC ("Tate & Lyle") announces today it has signed an agreement for the sale of its EU Sugar Refining operations ("EUS") to American Sugar Refining, Inc. The consideration is £211 million payable in cash, subject to closing adjustments for net cash and working capital, with the proceeds used to reduce Tate & Lyle's net debt1.
On 27 May 2010, Tate & Lyle announced its clear intentions to focus, fix and grow its business. Today's announcement is fully consistent with those intentions and will result in a more focused, less volatile business, and a solid platform to deliver sustainable long-term growth in Speciality Food Ingredients, supported by cash generated from Bulk Ingredients.
EUS consists of the cane sugar refineries in London, UK, and Lisbon, Portugal, the Lyle's Golden Syrup factory in London, UK, the associated sugar and syrup brands and the Tate & Lyle Process Technology consulting business. In the year ended 31 March 2010, these businesses had external sales of £689 million and made an adjusted2 operating profit of £14 million (after transitional aid of £17 million), and had gross assets of £374 million at 31 March 2010. The sale excludes historic UK pension assets and liabilities and is expected to give rise to a book loss on disposal, before costs, of approximately £55 million, subject to exchange rate movements and the timing of completion. The transaction is expected to be neutral to the Group's adjusted earnings per share on total operations in the 2011 financial year.
The completion of the transaction, which is conditional upon anti-trust clearance in Portugal, is expected to occur in approximately two months. Payment of £5 million of the consideration is contingent on the transfer of certain joint venture shareholdings that are subject to pre-emption rights held by the other shareholders.
Tate & Lyle has provided American Sugar Refining, Inc. with a perpetual worldwide licence to use the Tate & Lyle brand in connection with the retail sale of sugar and in other limited circumstances.
Tate & Lyle also announces the launch of processes to sell the remaining businesses within the Sugars division, principally Molasses and Vietnamese sugar.
The Sugars division will be classified as discontinued in the Interim Results to 30 September 2010.
Javed Ahmed, Chief Executive of Tate & Lyle said:
"Sugar refining has enjoyed a long and proud history within Tate & Lyle, but we believe the interests of this business and its employees are now best served by being part of a company for whom sugar refining is core. I sincerely thank our employees for their hard work and commitment over the years, and wish them every success in the future.
"Tate & Lyle's clear priority is to grow its Speciality Food Ingredients business, supported by cash generated from Bulk Ingredients. This disposal will enable us to concentrate our resources on delivering our strategic objectives as we focus, fix and grow our business."
Note 1 Net debt at 31 March 2010 was £814 million.
Note 2 Excluding exceptional items and amortisation of acquired intangibles.
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For more information contact Tate & Lyle PLC:
| Chris McLeish, Director of Investor Relations |
| Tel: +44 (0) 20 7977 6211 or Mobile: +44 (0) 7919 102 730 |
| William Baldwin-Charles, Head of Media Relations |
| Tel: +44 (0) 20 7977 6165 or Mobile: +44 (0) 7810 151 425 |
About Tate & Lyle:
Tate & Lyle is a global provider of ingredients and solutions to the food, beverage and other industries, operating from more than 45 production facilities around the world. Through our large-scale, efficient manufacturing plants, we turn raw materials into distinctive, high quality ingredients for our customers. Our ingredients and solutions add taste, texture, nutrition and increased functionality to products that millions of people around the world use or consume every day.
Tate & Lyle's range of leading branded food ingredients includes SPLENDA® Sucralose, PROMITOR™ Dietary Fiber and STA-LITE® Polydextrose. Tate & Lyle also produces branded industrial ingredients including Bio-PDO™, Ethylex® and Sta-Lok® paper starches; and staple ingredients such as high fructose corn syrup, ethanol, citric acid and basic starches. In addition to providing a wide range of ingredients our Innovation and Commercial Development Group supports customers by providing product development, technical advice and proprietary consumer insight studies.
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 2010, Tate & Lyle employed 5,666 people in its subsidiaries and joint ventures, and sales totalled £3.50 billion. http://www.tateandlyle.com.
SPLENDA® is a trademark of McNeil Nutritionals, LLC
Copyright Business Wire 2010