Imperial to sell Wholesome Sweeteners stake to boost liquidity

Wholesome Sweeteners, a Texas-based supplier of organic and Fair Trade certified sugars, was set up in 2001 as a joint venture between Imperial Sugar and a European importer of natural and organic unrefined sugars, Edward Billington & Son. Imperial Sugar has agreed to sell its stake to an affiliate of Arlon Group, a private investment group focused on food and agriculture, as part of its efforts to increase liquidity.

Imperial’s shares jumped 24% in morning trading on Thursday, to spike at $7.15 by 10am, before slipping back to $5.84 by midday. The stock price has been trading between $2.55 and $25.68 during the past 52 weeks

In January, the company’s president and CEO John Sheptor said that Imperial Sugar was considering selling assets to increase liquidity, after reporting a much larger than expected net loss for the fourth quarter of 2011, of $32.5m, or $2.73 per share. Analysts polled by Thomson Reuters had expected a net loss of $0.89 per share.

For the first quarter of fiscal 2012, to December 31, 2011, the company reported a net loss of $3.5m, or $0.29 per share, on net sales of$227.7m. For the same period a year earlier, it reported a net loss of $8.9m, or $0.75 per share, on net sales of $227.4m.

Reporting first quarter results in February, Sheptor said the company was in the late stages of exploring the potential sale of its interest in Wholesome Sweeteners.

Imperial Sugar said it would gain $35m-$40m from the sale, which recorded sales of $117m in its latest financial year.

The transaction is expected to be completed in April, subject to certain conditions.

The company has struggled to recover financially since a dust explosion at a Georgia refinery four years ago, in which 13 people were killed and nearly 50 were injured. The facility produced about nine percent of the United States’ refined sugar supply for the full fiscal year prior to the disaster.