Wilmar International Ltd., the world’s largest palm-oil processor, plans to acquire a stake of less than 25 percent in India’s Shree Renuka Sugars Ltd., according to two people with knowledge of the matter.
Singapore-based Wilmar will pay less than yesterday’s closing share price for the stake in India’s largest refiner, said the people, who asked not to be identified because the deal hasn’t been made public. Shree Renuka rose 3.5 percent to 22.40 rupees at the close of trading in Mumbai. The closing price implies a value of less than 3.8 billion rupees ($61 million) for the stake.
An agreement would add to Wilmar’s sugar assets from Australia to New Zealand, Indonesia and Morocco. It is the largest cane miller in Australia and the investment would allow it to expand in India, the world’s biggest sugar consumer.
Wilmar declined to comment in an e-mail. Narendra Murkumbi, managing director of Mumbai-based Shree Renuka, wasn’t immediately available on his mobile phone.
Wilmar will look to make “synergistic and accretive strategic investments,” Chief Executive Officer Kuok Khoon Hong said in the company’s earnings statement today. It didn’t mention its interest in Shree Renuka.
Shree Renuka has risen 12 percent this year, giving it a market value of 15 billion rupees.
Shree Renuka had total debt of 84.8 billion rupees as of March 31, 2013, according to data compiled by Bloomberg. That’s up from 8.4 billion rupees in 2008.
Wilmar rose 1.5 percent to S$3.36 at the close in Singapore.