Sucrogen sale to Wilmar receives FIRB approval
Federal Treasurer Wayne Swan yesterday announced the Foreign Investment Review Board’s approval of the sale of CSR Ltd’s sugar and renewable energy business, Sucrogen, to Singaporean food giant Wilmar International.
“I have taken account of Wilmar’s ambitious growth plans for Sucrogen. These include the expansion of the company’s Australian operations by providing better access for its sugar products to growth markets in Asia, and jointly developing refining facilities and distribution networks in the region,” said Swan.
“Wilmar has informed FIRB that it does not anticipate any significant changes to Sucrogen’s operations and its management, with current employment conditions remaining unchanged. Wilmar has also advised that if its growth plans are achieved, there will be increased jobs in the Australian sugar industry.”
As part of the decision, Wilmar (through Sucrogen) will be restricted in its ability to influence industry marketing body Queensland Sugar Limited, if it chooses to take its marketing elsewhere. Any interest in sugar storage business Sugar Terminals Ltd by Sucrogen will also be subject to “proper regard to the broader interests of the industry and other participants”.
Proceeds of the sale to CSR’s shareholders will be limited, however, with the company required to keep back enough money to cover its existing asbestos compensation claims, as well as costs to cover estimated future claims.
“CSR has consistently stated that it accepts its responsibilities with respect to its asbestos liabilities and that it would maintain a responsible capital structure to support its future obligations, as it has done for over 20 years,” said a release by the company.
“As further evidence of this commitment, CSR has agreed to put in place arrangements for the external oversight by an independent body of any repatriation of capital by CSR (other than ordinary dividends) to its shareholders.”
The transaction remains subject to approval from the Overseas Investment Office (OIO) in New Zealand and other “minor customary conditions”. The sale can take place within five days of completion of these conditions, which CSR said it expects to occur before the end of November.