Tate & Lyle PLC announced today that it has agreed, subject to the completion of satisfactory due diligence and approval by the Securities and Exchange Commission of Zambia and the Zambia Competition Commission, to sell its 50.87% share in Zambia Sugar Plc for US$11.4 million (£7.9 million) to Illovo Sugar Limited (“Illovo”). The sale proceeds will be used to pay down Group debt.
Following completion of the sale, Illovo will extend an equivalent offer to all other shareholders of Zambia Sugar Plc. An announcement confirming the results of Illovo’s due diligence will be made in approximately two weeks. The price remains subject to due diligence review.
Larry Pillard, Chief Executive Tate & Lyle PLC said:
“This transaction is another step in our objective to exit those businesses that we cannot successfully develop further to enable us to build our value added product portfolio.”
In an additional announcement made in Zambia, Stanley Musesengwa, Chairman of Zambia Sugar Plc and Chief Executive Officer, Tate & Lyle Europe, said:
“Zambia Sugar is an excellent company, in which Tate & Lyle has been pleased to play a major development role over many years. However, Tate & Lyle PLC’s strategy is to focus resources on its major businesses with global markets and portfolios of value-added products. As part of this strategy, Tate & Lyle PLC sold its Australian cane sugar business last year and has announced it is in negotiations to sell its US beet sugar business.
“Zambia Sugar is now entering a new phase from a position of strength, having so successfully become competitive in the region and following its record-breaking production of 209,270 tonnes of sugar last year. Illovo is a major player in the sugar industry with a long-term commitment to the region. Illovo owns mills in Malawi, Mauritius, Mozambique South Africa, Swaziland and Tanzania as well as a beet sugar business in the USA. This commitment, and a strong technical base in sugar farming and milling, can only enhance Zambia Sugar’s future prospects.
“I would like to thank the Zambia Sugar workforce whose commitment and dedication has done so much to make Zambia Sugar a success following the rehabilitation and expansion undertaken since privatisation five and a half years ago. The progress made by Zambia Sugar would also not have been possible without the guidance and support of my Board colleagues and of The Government of Zambia.
“If approved, this transaction involves only the sale of shares in Zambia Sugar to Illovo and involves no other change to the entity. The company looks forward to another successful season and I am confident that it will be a case of ‘business as usual’ “.