Barry Callebaut and Petra Foods Settle Dispute
31 Aug 2015 --- Barry Callebaut and Petra Foods have settled their dispute regarding the purchase price for the Cocoa Ingredients Division, which Barry Callebaut had acquired from Petra Foods in 2013.
As a result of the settlement, Petra Foods has today paid to Barry Callebaut the lump sum of $38.8m in cash, plus interest of $800,000.
The negotiations were conducted amicably and outside the arbitration proceedings commenced by Petra Foods in December 2013, which proceedings are now discontinued. The dispute did not have any impact on the transfer of the Cocoa Ingredients Division to Barry Callebaut, which had been taken over entirely as of the closing of the transaction and was subsequently integrated into the Barry Callebaut Group’s cocoa business. The deal ensured Barry Callebaut became the world’s leading cocoa supplier; it acquired seven manufacturing sites in Asia from Petra, including sites in Indonesia, Malaysia and Thailand.
As part of the settlement the parties agreed to extend the term of the cocoa supply agreement until end of June 2020.
Mr John Chuang, Petra Food’s Chief Executive Officer, said, “I am pleased that this dispute has been amicably resolved to the satisfaction of both parties and we can now put this episode behind us.”
As a result of the settlement of this dispute with Barry Callebaut, Petra will recognise a onetime exceptional charge of US$19.4 million. Although this is a non-operational item, for Petra, this onetime charge is likely to result in a net loss for 3Q 2015 and a drag on the full year 2015 performance, notwithstanding that the core business is likely to remain profitable.
The Brazilian tax claims (which were previously announced on 24 February 2015) will continue to be contested.
The parties agreed to not disclose any further details of the settlement.
