March 17, 2020

Sale of Nufarm Brazil to Sumitomo gets regulator's OK

     
 

Seeds and crop health company Nufarm has received clearance from Brazil's competition regulator, the Administrative Council for Economic Defence (CADE), to proceed with the sale of Nufarm Brazil to Sumitomo of Japan.

The sale is expected to materialise on April 1, the company said.

The gross purchase price of A$1.188 billion (US$ 712.337 million) will be adjusted to reflect working capital and net debt balances as at March 31, and the net proceeds received by Nufarm will be used to pay down existing debt facilities.

The South American businesses have made a strong contribution to Nufarm's earnings in the first half of the financial year ended September 2019, but are expected to record a loss before interest, tax, depreciation and amortisation of around A$10 million ($5.99 million) in the second half up until April 1, 2020. This reflects the normal seasonal trading patterns of these businesses, said Nufarm.

Nufarm added that the completion of the sale would have a favourable impact on the company's financing costs as well as depreciation and amortisation costs.

Nufarm confirmed EBITDA (earnings before interest, tax, depreciation and amortisation) for the first half of FY 2020 were in the range of A$55 million ($32.965 million) to A$65 million ($39,025 million).