IOI Corp to dispose of 70% stake in Loders Croklaan for RM3.94b

PETALING JAYA: IOI Corp Bhd plans to dispose of a 70% stake in wholly owned specialty oils and fats manufacturing subsidiary Loders Croklaan Group B.V, to Koninklijke Bunge B.V (KBBV) for US$595 million plus €297 million, totalling about RM3.94 billion.
The disposal will include the sale of IOI Lipid Enzymtec Sdn Bhd and IOI Edible Oils (HK) Limited after an internal restructuring exercise by IOI Corp. IOI Loders Croklaan SC B.V. and Soyuz Loders Croklaan Corporation are not to be included in the sale.
IOI Lipid and IOI Edible contributed RM165.3 million in net profit to IOI Corp for the financial year ended June 30, 2016.
KBBV is a subsidiary of Bunge Ltd, a leading global agribusiness and food company operating in over 40 countries with approximately 32,000 employees.
Bunge buys, sells, stores and transports oilseeds and grains to serve customers worldwide; processes oilseeds to make protein meal for animal feed and edible oil products for commercial customers and consumers; produces sugar and ethanol from sugarcane; mills wheat, corn and rice to make ingredients used by food companies; and sells fertilizer in South America.
The group is expected to record a gain of RM2.5 billion from the sale.
The proceeds from the disposal will be used for repayment of bank borrowings (RM1.97 billion), future investment opportunities /working capital (RM1.17 billion), dividend to shareholders of 13 sen a share (RM788 million) and estimated expenses of the deal (RM10 million).
The repayment of borrowings will result in an interest savings of RM58.33 million per annum for IOI Corp.
The proposed disposal allows IOI Corp to enter into a strategic business collaboration with Bunge and leverage on the size of Bunge’s operations, established business network and expertise to build and expand Loders.