Singaporean Firm Wilmar International Buys Chelsea Sugar in Australia & NZ

Online, July 12, 2010 (Newswire.com) - [For Immediate Release]
(Wellington, 10 July 2010) - Australian conglomerate CSR, announced the sale of its sugar assets to Wilmar International for an estimated US$2.14 billion. The deal gives Wilmar International all of the Australian conglomerate's assets including its stake in the New Zealand Sugar Company, owner of the Chelsea brand and Birkenhead refinery.

CSR, listed in Singapore and the world's biggest palm oil trader, beat another offer from the Chinese company, Bright Food Group that had been seeking the investment for months, when CSR's board accepted, albeit conditionally, Wilmer International's offer for its assets Monday. However, the sale still remains subject to approval from the Australian Foreign Investment Review Board and the New Zealand's Overseas Investment Office. If it goes through, Wilmar International is expected to conclude the purchase before the end of 2010.

Ian Blackburne, CSR chairman, said Sucrogen's sale would allow CSR to distinguish its two diverse businesses, namely the sugar division and its building products business. In a statement to the Australian Stock Exchange, Blackburne said the company's board had been working towards the sale objective for some time and after exploring the available strategic options, CSR's board believed the sale of its assets to Wilmar International is in the interests of its shareholders and stakeholders. Jeremy Sutcliffe, CSR managing director, said the sale price was an attractive valuation and would deliver vital value to the company's shareholders. As such, the Wilmer International bid is inclusive of an A$403 million debt. It is hoped that the purchase of Sucrogen will enable Wilmar mills take up about 4% of international sugar trade, currently; Wilmer mills produces 45% of Australia's raw sugar.

Analysts were upbeat over the offer, terming it as "good price" for shareholders such as the Guinness Peat Group, with about 30,000 New Zealand retail investors and an additional number of big institutional investors that owns 5% of CSR. A spokesman for GPG Australian director Gary Weiss said the firm, which has proposed splitting off its Australian assets, had no comment to make on the deal or what it would mean for its shareholders.

CSR had expected its profits from the sale to peg at A$1.6 billion but had not divulged details over what its shareholder might get rather saying through a statement that the company was currently evaluating a range of capital management options to use the profits efficiently, while at the same time pondering a number of strategic opportunities. The sale of the sugar division would leave CSR focused on its building products business.

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