Tate & Lyle exits molasses business

25th Nov 2010 07:59

Food ingredients firm Tate & Lyle is to sell its molasses business to Belfast grain trader W&R Barnett for £67m in cash.Proceeds from the sale will be used to reduce net debt.The assets being sold comprise the global molasses trading desk based in London, plus other worldwide marketing operations, together with the UK third party storage operations. These businesses had external sales of £228m and made an operating profit of £13m in the year to 31 March 2010, and had gross assets of £81m at that date. The sale excludes historic UK pension assets and liabilities and, after costs and subject to movements in exchange rates, is expected to give rise to a small book profit on disposal.The disposal of the business was flagged by the company at the beginning of July when Tate & Lyle offloaded its EU sugar refining operations. At that time the company said it would also sell off its Vietnamese sugar business; the company said progress is still being made on the plans to sell the Vietnamese business."Tate & Lyle's clear priority is to grow its Speciality Food Ingredients business, supported by cash generated from Bulk Ingredients," said the group's chief executive, Javed Ahmed. "This disposal represents another important step as we focus, fix and grow our business," he added.