March 6 (Bloomberg) -- Peru’s government will hand over its remaining shares in three sugar mills by the end of June, marking its withdrawal from an industry expropriated by a military regime in 1969, a congressman said.
The government plans to transfer its stakes in Empresa Agroindustrial Pomalca SA, Empresa Agroindustrial Cayalti SA and Empresa Agroindustrial Tuman SA to workers in exchange for their unpaid benefits, Jose Leon, president of the congressional agricultural committee, said by telephone today from Lima. The state owns 33 percent of Pomalca, 24 percent of Cayalti and 7.2 percent of Tucuman.
“These companies have been inefficient due to poor state management,” said Leon, who as chairman oversaw the sale of Peru’s largest sugar cooperative Casa Grande SAA to Gloria SA in 2006. “It will be positive for the state to start withdrawing from companies, as it brought a great deal of disorder.”
Peru’s sugar production has doubled since 1997 when then-President Alberto Fujimori overturned a 1969 agrarian reform and sold shares in Peru’s 11 sugar cooperatives. Output was 1.25 million metric tons last year, according to the U.S. Department of Agriculture.
The state’s shareholdings in Pomalca and Tuman will be priced at their average traded price in the 30 days to Dec. 28, said Leon, a former agriculture minister. The stake in Cayalti will be calculated from last year’s earnings, he said.
Workers will be able to buy the shares in exchange for wages, health insurance and other compensation owed to them by the companies, which will then owe the state.
Pomalca and Tuman, which are both controlled by the Peru’s Oviedo Group, have gained 16 and 18 percent, respectively, this year in Lima trading. Cayalti, which is under management by state development bank Cofide, hasn’t traded this year.
Raw sugar for May delivery fell 2.6 percent, to 24.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York.
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