Disposal of European Starch facilities
Tate Lyle announces that, following completion of consultation with the European and local works councils and other employee representatives announced on 9 May 2007, it has entered into an agreement with Syral SAS (a subsidiary of Tereos of France) for the sale of its starch facilities in the UK, Belgium, France, Spain and Italy (together “the business”). The Belgian entity includes the head office, shared service centre and single billing entity in Aalst, Belgium (“SSC”) which is excluded from the sale. The disposal is subject to antitrust approval in Europe and completion is expected by 30 September 2007 at the earliest.
On completion, Tate Lyle will receive a consideration of €310 million (£209 million) subject to closing adjustments relating to cash, debt, working capital and capital expenditure.
As set out in the Chairman's Annual General Meeting and Interim Management Statement published today, proceeds of the disposal are intended to be utilised as part of a share buy back programme.
In the year to 31 March 2007, the business had total sales of £520 million and a profit before interest and exceptional items of £38 million. At 31 March 2007 the business had gross assets of £253 million and net operating assets of £184 million. The disposal is expected to result in an exceptional loss of approximately £20 million after restructuring costs.
Iain Ferguson, Chief Executive, Tate Lyle said, 'The sale of these starch facilities marks another important step in focusing Tate Lyle's business on its value added strategy and reduces the impact of our exposure to volatile markets and to the EU sugar regime. I would like to take this opportunity to thank our employees at each of these facilities for their commitment and hard work over the years and wish them every future success.'
Citi acted as financial adviser to Tate Lyle PLC.
Tate Lyle operates through two global business units, Speciality Food Ingredients and Bulk Ingredients, supported by Innovation and Commercial Development. The Group's strategy is to become the leading global provider of Speciality Food Ingredients through a disciplined focus on growth, and by driving the Bulk Ingredients business for sustained cash generation to fuel this growth.
Speciality Food Ingredients include starch-based speciality ingredients (corn-based speciality starches, sweeteners and fibres), no calorie sweeteners (including SPLENDA® Sucralose) and Food Systems which provides blended ingredient solutions. Bulk Ingredients include corn-based bulk sweeteners, industrial starches and fermentation products (primarily acidulants). The co-products from both divisions are primarily sold as animal feed.
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 2012, Tate Lyle sales totalled £3.1 billion. http://www.tateandlyle.com. SPLENDA® is a trademark of McNeil Nutritionals, LLC
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