Medals galore for Fonterra cheeses
Fonterra cheeses are continuing their golden run at the annual New Zealand Cheese Awards.
Fonterra is selling its 50% share of DFE Pharma for $633million.
The deal with private equity firm, CVC Strategic Opportunities II is made up of a cash payment of $537 million, payable on completion of the sale, plus an interest-accruing vendor loan of $96 million, for a term of up to 15 years. Built into the deal is a potential additional payment of up to $44 million based on DFE’s performance over two years.
The sale is subject to receipt of regulatory approvals from competition authorities.
Fonterra says the cash from this sale, along with proceeds from our other asset sales across the year – which includes the significant contribution from Tip Top – will give it over $1 billion available for debt reduction.
Fonterra chief executive Miles Hurrell says the co-op set itself a tough initial target for debt reduction.
“We are pleased with the progress we are making. It’s an important milestone in our co-op’s plan to lift our business performance.
“A year ago, we started a full portfolio review to re-evaluate every investment, major asset and partnership, to make sure they were still right for the co-op.”
In March, Fonterra announced it was reviewing its share of DFE Pharma, a 50% joint venture with Royal Friesland Campina. DFE Pharma was identified for sale due to the substantial capital required for its future growth.
“We are now at the end of that process and have sold our share of DFE Pharma to CVC Strategic Opportunities II, a fund managed by CVC Capital Partners, a leading private equity and investment advisory firm, managing approximately US$83 billion of assets in 73 companies worldwide,” Hurrell says.
Hurrell says that Fonterra was pleased to have secured a good sale price and will stay committed to the ongoing success of the DFE Pharma business through a long-term supply agreement and the interest-accruing vendor loan.
“A big part of the success of DFE Pharma has been the high-quality lactose produced by the team at Fonterra’s Kapuni site in Taranaki and it is a good outcome to be able to continue to supply this.
“This milestone, along with the significant inroads made in our capital and operational expenditure during FY19, makes for a good initial chapter in our business turn-around. It puts us on the right footing to deliver our new strategy and a sustainable lift in our performance.” says Hurrell
Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm.
The opportunity to spend more time on farm while providing a dedicated service for shareholders attracted new environmental manager Ben Howden to work for Waimakariri Irrigation Limited (WIL).
Federated Farmers claims that the Otago Regional Council is charging ahead unnecessarily with piling more regulation on rural communities.
Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.
OPINION: We have good friends from way back who had lived in one of our major cities for many years.
Listed Canterbury milk processor Synlait’s shares have been placed in a trading halt.
OPINION: European farmers are going to extreme lengths to have their message heard.
OPINION: The hustle and bustle of one of Bangkok's most popular fast food outlets may feel a world away from…