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 -------------
Last price: 57c High/Low for year: 74c/36c P/E Ratio: 4.19 per cent
Background ---------- 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
BPC Price at posting:
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