Imperial Sugar Company (OTC BB: IPRL) yesterday announced that it has signed a Letter of Intent (“LOI”) to sell the capital stock of Michigan Sugar Company, which owns four sugarbeet factories in Michigan, to Michigan Sugar Beet Growers, Inc., a new Michigan agricultural grower-owned cooperative. The transaction is subject to the negotiation of a definitive agreement and approval by the Company’s Board of Directors and the U.S. Bankruptcy Court for the District of Delaware as Imperial Sugar Company filed a petition for relief under chapter 11 of the U.S. Bankruptcy Code on January 16, 2001. Terms of the transaction include a cash payment of $55 million upon closing, deferred payments of $10 million and the assumption by the cooperative of $18.5 million in industrial development bonds.
Under the terms of the LOI, the cooperative must have secured financing and subscribed sugarbeet growers by October 1, 2001, to complete the transaction. In the event the closing is delayed beyond that date, the LOI provides that the Company will manage the four Michigan factories and market the refined sugar processed under a lease and management agreement with the cooperative in order to process the 2001 crop. Imperial Sugar Company and the cooperative will enter into a sales and marketing agreement under which the Company will continue to market the refined sugar processed by Michigan Sugar Company following the sale.
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“We are happy that we and our Michigan Sugar Company growers have been able to reach agreement on this important transaction. It is a win-win situation for both parties. It enhances Imperial Sugar Company’s financial restructuring plans, while enabling the Company to derive a significant and continuing income stream from its marketing services. As the new owners, the Michigan growers will be better able to control their own future in the domestic sugar industry,” stated James C. Kempner, President and Chief Executive Officer of Imperial Sugar Company.
Imperial Sugar Company is the largest processor and marketer of refined sugar in the United States and a major distributor to the foodservice market. The Company markets its products nationally under the Imperial(TM), Dixie Crystals(TM), Spreckels(TM), Pioneer(TM), Holly(TM), Diamond Crystal(TM) and Wholesome Sweeteners(TM) brands. Additional information about Imperial Sugar may be found on its web site at www.imperialsugar.com.
Statements regarding the Company’s ability to complete its reorganization proceedings timely, the outcome of the reorganization plan, the Company’s ability to sustain current operations during the pendency of the reorganization including its ability to maintain normal relationships with customers, the ability of the Company to establish normal terms and conditions with suppliers and vendors, costs of the reorganization process, the adequacy of financing arrangements during the reorganization period, future market prices, operating results, synergies, sugarbeet acreage, future operating efficiencies, cost saving and other statements which are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, the results of the bankruptcy proceedings, court decisions and actions, the negotiating positions of various constituencies, the results of negotiations, market factors, the effect of weather and economic conditions, farm and trade policy, the ability of the Company to realize planned cost savings, the available supply of sugar, available quantity and quality of sugarbeets and other factors detailed in the Company’s Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
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