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Join date : 2014-02-28
IFC to invest US $ 20mn in Cargills Foods
The International Finance Corporation (IFC), the private sector investing arm of the World Bank, is planning to acquire an 8 percent stake in the Cargills group’s, Cargills Food Company (Pvt.) Limited (CFC), for a consideration of Rs.2.55 billion (US $ 20 million), in order to promote inclusive growth in the island. “Cargills Foods has a unique opportunity to improve the lives of a large number of people employed across its supply network,” said IFC Country Manager for Sri Lanka and Maldives Adam Sack. He further expressed that IFC will bring global expertise and industry knowledge to boost the company’s efficiency and standards throughout its supply chain in addition to the capital. Both parties have now entered into an agreement and a further disclosure will be made once the transaction is completed. “IFC’s investment, at a time when our retail segment is facing challenges from macro and fiscal environments, is a strong endorsement of Cargills Food City’s business model and business ethos of the group. Cargills Food City is built on the principles of creating value for consumers, producers and the community and is aligned with the country’s development agenda,” Cargills (Ceylon) PLC Deputy Chairman Ranjith Page said. IFC’s investment was based on a pre-investment equity valuation of Rs.29.325 billion in CFC and the statement from Cargills (Ceylon) PLC said the valuation was endorsed by IFC. This is the second such equity investment by IFC in a Cargills group company, after acquiring a 10 percent stake in the newly opened Cargills Bank. According to a Cargills company spokeswoman, IFC has decided to invest in CFC due to its future potential following the corporate restructuring carried out within the group, following the shareholder approval received last September. Part of the restructuring proceedings was the establishment of CFC, which now carries out the retail operations of the Cargills group, including the Food City and Food City Express supermarket chains. CFC is a fully-owned subsidiary of Cargills (Ceylon) PLC and carries out the retail business of the group, which comprises of the Food City and Food City Express supermarket chains and sources produce from over 10,000 Sri Lankan farmers and employs 5,800 people across its network. Cargills (Ceylon) PLC now maintains operations as a pure investment holding company with a portfolio in retail, food, manufacturing, brewery, leisure and property development and strategic investments. (CW)
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