BPC burns, philp & company limited

to buy Kraft yeast & bakery business in Sth Americ

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    Burns, Philp to acquire Kraft's yeast business for
    AAP|Published: Wednesday June 5, 11:03 AM



    Food ingredients supplier Burns, Philp and Co Ltd today said it had entered an agreement to acquire Kraft Foods International Inc's yeast and industrial bakery ingredients business in Latin America.

    Burns, Philp said the sale price was $US110 million ($A192.64 million).

    Burns, Philp also said it was planning to raise up to $US450 million ($A788.09 million) through a senior subordinated notes issue.


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    "Burns Philp has entered into preliminary agreement with Kraft Foods International Inc to acquire its yeast and industrial bakery ingredients in Latin America for $US110 million," the company said.

    "The business, which operates under the Fleischmann's name, has its main operations in Brazil, Colombia, Ecuador, Venezuela and Peru."

    Burns, Philp said the sale agreement was conditional on further negotiations and the approval of the Kraft board.

    At the same time, Burns, Philp said it planned to raise up to $US450 million ($A788.09 million) through a notes issue.

    The notes would have a fixed coupon and a term of 10 years, leaving them due for repayment in 2012, it said.

    "The notes will be unsecured, guaranteed by certain of our subsidiaries and subordinated in right of payment to the senior debt of the Burns Philp group," the company said.

    It said it would offer the notes only to qualified institutional buyers both in the US and elsewhere.

    "This announcement shall not constitute an offer to sell or the solicitation of any offer to buy the notes or any securities issuable upon exchange of the notes in the US or any other jurisdiction," Burns, Philp said.

    Burns, Philp said part of the proceeds of the notes issue would be used to redeem all of the 5.5 per cent guaranteed convertible debt bonds which remained outstanding.

    The face value of those notes was approximately $US98.3 million ($A172.15 million).

    "Further announcements regarding the proposed acquisition, the notes issue and the redemption of the 5.5 per cent guaranteed subordinated debt bonds, will be made at appropriate times," Burns, Philp said.

    At 1058 AEST, Burns, Philp shares were up one cent at 67 cents.


    I hold BPC

    Regards

    Desmond

 
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