Louis Dreyfus Seeks New CEO Before Possible IPO or SaleAndy Hoffman
Louis Dreyfus Commodities BV is seeking a replacement for Chief Executive Officer Ciro Echesortu as part of a reorganization by the largest raw-cotton trader to prepare for any future initial public offering or stake sale.
Chief Financial Officer Claude Ehlinger will be interim CEO from June 1 and Echesortu, who took over in June 2013 to oversee the management changes, will be head of strategy, the Rotterdam-based food and agricultural company said today in a statement.
Closely held Louis Dreyfus has been aligning management and governance to the standards of publicly traded companies in case of an IPO or sale of a shareholding, Louis Dreyfus Holding Chairman Margarita Louis-Dreyfus said April 2. There aren’t any immediate plans for an offering or strategic partner, she said.
“Thanks to our solid performance in 2013, the conditions are now right to implement a longer-term solution,” Louis-Dreyfus, who controls the company through a family trust, said in today’s e-mailed statement. Echesortu agreed a year ago to bring in changes including to the management structure. Ehlinger will resume his CFO duties once a permanent successor is found.
The CEO search will be led by the company’s supervisory board, which added three new members on April 7 including Michel Demare, chairman of Syngenta AG and vice-chairman of UBS AG.
The company’s profit sank by 34 percent last year as lower commodity prices and reduced volatility hurt trading operations, it said March 26. Price swings for its products, which include cotton, rice, oilseeds, wheat and green coffee, slid 20 percent from 2012, when a drought in the U.S. sent prices soaring.
Capital spending totaled $689 million in 2013, according to its annual report. The company plans to double asset holdings by spending $4 billion on “mid-sized” investments by 2018. It has raised funds with bonds listed in Singapore and Luxembourg.
Louis Dreyfus said in October it formed a joint venture with Brooklyn Kiev LLC to develop and manage a multi-commodity terminal at the Black Sea port of Odessa. Four months later it announced the purchase of Ilomar Holding NV, an owner of exchange-licensed cocoa and coffee warehouses.
One of the four so-called ABCD agricultural commodity companies, including Archer-Daniels-Midland Co., Bunge Ltd. and Cargill Inc., Dreyfus makes up about a 10th of agricultural product trade flows, according to its website.