UPDATE 1-Wilmar expands sugar reach with India's Shree Renuka deal
By Sumeet Chatterjee and Chris Prentice
MUMBAI/NEW YORK Feb 20 (Reuters) - Singapore's Wilmar International said on Thursday it has agreed to invest up to $145 million for a major stake in India's Shree Renuka Sugars, which will give a sugar upstart a foothold in the biggest consuming nation.
The transaction, which will be completed in multiple steps, will see Wilmar - the world's top palm oil processor with business interests in sugar, lauric oils and other commodities - and the founders of the Indian company owning equal stakes in Shree Renuka.
While the value of the deal is relatively small compared with multi-billion dollar deals seen across the industry over the past decade, it is Wilmar's third big move to grow in sugar in four years and expands its geographic footprint.
Buying a stake in Shree Renuka marks its first foray into the world's top sugar producers, Brazil and India, amid burgeoning demand in emerging economies. Global consumption is expected to grow 2.5 percent to about 181 million tonnes in 2014/15.
With 11 mills and two refineries, Shree Renuka "fits perfectly" with Wilmar's operations in Australia, New Zealand and Indonesia, sugar head Jean-Luc Bohbot said in a statement.
"Besides the benefit for our sugar business, this venture will complement the development of our edible oils and other business in India," said Wilmar Chairman and Chief Executive Officer Kuok Khoon Hong in the statement.
The investment will help loss-making Shree Renuka pay down debt, which totalled $1.2 billion last June. Continuación...