Australia's diversified business group CSR can now proceed with the demerger of its sugar and renewable energy business Sucrogen, a federal court ruling in favour of the proposal confirmed today.
Through an earlier decision in February, the court had declined the convening of a meeting of CSR's shareholders to consider the proposed demerger of the sugar business, doubting the company's ability to meet its asbestos liabilities following the demerger.
Further to that, CSR launched an appeal against the earlier verdict.
Welcoming the court's decision, CSR said in a statement that a separation of its two very different operating businesses has the potential to create additional value for shareholders. CSR can now table the demerger proposal before its shareholders.
Further to the ruling, CSR can now continue its negotiations with China's Bright Food Group Co, which has shown its interest in Sucrogen. Earlier this month, Bright Food submitted a revised A$1.75 billion ($1.62 billion) conditional offer to acquire the business, up by $250 million compared to its earlier offer of A$1.5 billion. (See: China's Bright Food sweetens takeover offer for Australia's CSR sugar unit)
Sydney-based CSR is one of Australia's oldest companies engaged in diversified businesses including building products, sugar, aluminium, etc, with operations spread throughout Australia as well as in Asia and New Zealand.
The company is a leading supplier of a wide range of building products to the construction industry. As Australia's largest sugar producer, CSR operates seven mills in some of the country's most productive sugarcane regions and also owns 75 per cent stake in joint venture sugar refining facilities in Austria and New Zealand.
CSR has 25 per cent stake in Tomago aluminium smelter, Australia's second-largest, operated by Alcan.
The company reported revenue of A$3.55 billion in 2009.