6th May 2016 07:14
LONDON (Alliance News) - MP Evans Group PLC on Friday said it is selling its 34% stake in Australian beef-cattle company North Australian Pastoral Co for USD79 million, and may pay a special dividend to shareholders following the sale.
MP Evans, which also produces palm oil in Indonesia, said it is selling its stake in NAPCo to Queensland Investment Corp at a price of AUD18.50 per share.
This comes after media speculation last month that the group could be selling its holding.
NAPCo is MP Evans' sole investment left in Australia after it sold the Australian Woodlands business last year. MP Evans said it has decided to focus on its core business of Indonesian palm oil.
QIC also intends to purchase a further 61% stake in NAPCo from the Foster family, meaning it will own 95% of the company, although the Foster family plans to roll over shares into the new ownership vehicle so it will retain a 20% interest.
MP Evans said the cost of professional advice relating to the sale will total around USD1 million, with tax estimated to be around USD14 million, meaning it will receive net proceeds of USD64 million.
The group carrying value of MP Evans' investment in NAPCo is USD52 million, meaning that the profit after tax of the disposal is estimated to be USD12 million.
MP Evans said it will use the sale proceeds for its capital investment programme in respect of its unplanted areas of land in Indonesia, as well as prospective investment in new sustainable land.
Subject to completion of the sale, MP Evans will consider paying a special dividend of 5 pence per share.
"The group's focus has increasingly been on Indonesian palm oil, which has consistently delivered profitable growth, and proceeds from the sale will enable the group to achieve greater economies of scale. The board continues to believe that the long-term prospects for Indonesian palm oil remain favourable," Chairman Peter Hadsley-Chaplin said in a statement.
Shares in MP Evans were trading up 4.0% at 440.00 pence on Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
M P Evans