EXCLUSIVE France Tereos seeks to withdraw from its activities in China and Romania – sources

A view shows a logo at the entrance to the Tereos sugar factory in Escaudoeuvres, northern France, April 30, 2020. REUTERS / Pascal Rossignol / File Photo

French sugar producer Tereos is seeking to pull out of its businesses in China and Romania as part of a larger initiative by the new management to divest certain international assets in order to ease the group’s heavy debt and increase profitability, sources familiar with the matter said.

Tereos, the world’s second-largest sugar producer by volume, has reshuffled its management since an extraordinary meeting in December dismissed its chief executive.

The new team, which had expressed serious concerns about the losses of some of Tereos’ international businesses before taking over, said they were considering selling unprofitable or non-strategic assets but wanted to make a first move. group audit.

Tereos is in advanced talks with Singaporean firm Wilmar International (WLIL.SI) to sell its 49% stake in their starch joint venture in China, three sources familiar with the talks told Reuters.

The cooperative group is also seeking to withdraw from its loss-making Romanian sugar activities, said one of the three sources familiar with the matter, and another source.

Tereos declined to comment. Wilmar also declined to comment.

The joint venture with Wilmar, launched in 2012, operates two large starches in China.

Talks with the agribusiness giant had started even before Tereos’ new management took over, but had failed due to the low price offered by Wilmar before resuming this year, two of the three sources familiar with the matter said. .

A source said they were close to being closed and although the final price of the deal was unclear, the sale would still come at a significant loss for Tereos.

Wilmar is “in serious talks” to take a stake in Tereos’ starch business in China, a Singapore-based source close to the talks said.

Tereos, which has 12,000 members, bought the Romanian sugar company Ludus in 2012, as part of a large international expansion. But the unit has recorded losses every year since 2014, according to company records.

The new management want to stop the losses and have hired an international adviser to help them find a solution, with selling seen as the first option, two sources familiar with the matter said.

The advisor made initial representations to potential buyers, a source said.

But a sale of the Romanian activity could prove difficult because of its poor results but also because the region is not very attractive in terms of beet yields, the sources said.

If no buyer is found for the Romanian company, Tereos could shut it down completely, said a second source close to Tereos management.

The source said if a way could be found to keep the business going but stem the losses, Tereos would consider that, but that scenario seemed unlikely.

Tereos reported debt of 2.7 billion euros ($ 3.3 billion) at the end of last year, with annual revenue of around 4.5 billion euros .

The new management of the group is due to unveil its new strategy on Wednesday when the cooperative group publishes its annual results, said a spokesperson.

($ 1 = 0.8175 euros)

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