BPC burns, philp & company limited

Stock to watch - enters into sale of $83 mil

  1. 89 Posts.
    Sydney - Thursday - August 8: (RWE)
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    FOOD INGREDIENTS SUPPLIER
    SELLS AUSTRALASIAN TERMINALS


    Overview
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    Food ingredients supplier Burns, Philp & Co (BPC) has sold its
    Australasian terminals division to subsidiaries of Kaneb Pipe Line
    Operating Partnership for $83 million.
    Burns Philp announced plans to divest the division in April.
    Completion of the sale was conditional on obtaining a number of
    third-party consents, including approvals from the New Zealand Overseas
    Investment Commission and certain lessors.
    "The company has today entered into an agreement for the sale of
    the terminals division to subsidiaries of Kaneb Pipe Line Operating
    Partnership LP for anticipated sales proceeds of approximately $83
    million," Burns Philp said.
    "It is anticipated that these consents will be obtained and the
    sale completed prior to the end of August."
    BPC's terminals division is a provider of bulk liquid storage
    and handling services to the chemical, plastics and industrial food
    ingredients industries in Australia and NZ.
    The division operates in NZ through the company's subsidiary,
    Bulk Storage Terminals Ltd.
    The unit is the largest provider of bulk liquid storage in the
    Australian and NZ markets.
    Burns Philp said it decided to sell the division as it was no
    longer considered to be part of its core yeast and bakery ingredients
    operations.


    Share Details
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    Last price: 57c
    High/Low for year: 74c/36c
    P/E Ratio: 4.19 per cent



    Background
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    Burns, Philp & Co is a manufacturer, marketer and distributor of
    yeast and bakery ingredients, herbs and spices and a provider of
    terminal and bulk storage facilities.
    The company has operations in 20 countries in North America,
    South America, Europe, the Middle East, Africa and the Asia Pacific
    region.
    Burns, Philp & Co also owns the Fleischmann's brand, which is a
    supplier of industrial vinegar in North America.
    BPC is the largest Portside bulk liquid storage provider in
    Australia and NZ.
    The company reported a 16.7 per cent rise in net profit to $67.8
    million for the six months to end-December 2001.
    The result included a $10.1 million provision for the potential
    non-payment of a debt owed by collapsed US retailer Kmart.
    The company said the result had been driven by cost reduction
    initiatives, including plant consolidation, improved margins in certain
    regions, and continued growth in China, India, and Vietnam.
    Burns, Philp & Co launched a major restructuring plan after
    abnormal losses in September 1997 that included a $700 million writedown
    in the book value of its herb and spice businesses.
    The restructure included the divestment of the company's
    consumer businesses in Australia and NZ and sale of most of the herb and
    spice businesses.
    BPC then recapitalised in 2001 via a five-year term bank
    facility and a $240 million converting preference shares issue.
    ENDS


 
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