ADM Sells 20 Percent GrainCorp Stake

02 Dec 2016 --- Archer Daniels Midland Company (ADM) has announced that it has entered into an underwriting agreement to sell its 19.9 percent ownership stake in GrainCorp Limited (GNC) for a total value of about A$387 million (USD 287 million). The move comes just days after announcing it will complete major enhancement of its Chornomorsk, Ukraine, oilseed processing facility.

“As part of our ongoing portfolio management, we carefully considered our equity investment position in GrainCorp and determined that we could better meet our long-term returns objectives by reallocating that capital,” said ADM Chairman and CEO Juan Luciano. 

“This transaction will allow us to further reduce our invested capital, and it will provide cash that we can redeploy to higher-return investments as we continue to execute our balanced capital-allocation framework.” 

The transaction has been executed by way of an underwritten sale to an underwriter. 

Under the terms of the agreement, ADM will sell all of its 19.9 percent investment in the issued capital in GrainCorp at a price of A$8.53 (USD 6.33) per share.

It’s been a busy period for the company. The announcement to sell this capital comes just days after stating it will complete major enhancement of its Chornomorsk, Ukraine, oilseed processing facility.

Talking with FoodIngredientsFirst about the enhancements to the Ukraine oilseed processing facility, Anton Povkhan, ADM general manager of EU Softseed Crush said: “Production of sunflower seed in the Ukraine has more than doubled in the last ten years, and this new facility will allow us to better and more efficiently serve our customers in this region.”

“This facility will equally serve our food and feed customers in the region as we produce similar amounts of meal and oil products from sunflower seed and rapeseed.”

“Switch capacity allows us to optimize the crush types and rates in the facility depending on the harvest levels of each crop, current customer demand and the margin environment at any given point in time. This helps us run the plant as efficiently as possible to meet our customers’ needs.”

by Hannah Gardiner