Growers in the Western Sugar Company production area of Wyoming, Nebraska, Montana and Colorado were told to hold back on contracting with Tate and Lyle this season.
An alert from the Rocky Mountain Sugar Growers Cooperative said it was concerned that Tate and Lyle, who has been in negotiations to sell the company to the growers, will start contracting with growers.
“We are concerned that this contracting effort will conflict with the subscriptions which growers have already given to the Cooperative and the spirit of good faith to complete the purchase,"”the statement from the Board of Directors stated.
The Board told growers that negotiations with Tate and Lyle, owners of Western Sugar, on the purchase of the company are at a critical juncture. “We have received actual credit approval from our lenders that will allow us to close this acquisition. The only issues left to be resolved are reasonable and customary financial covenants that Tate and Lyle have not yet agreed to accept,” the release continued.
“If the growers contract directly with Tate and Lyle, our negotiating position to complete this transaction may be delayed or jeopardized. We believe it is in the best interest of all growers for the Cooperative purchase to go through. Tate and Lyle is not committed to operate Western Sugar long-term,” the statement continued.
Board members said that if the buyout efforts are not concluded now, the opportunity to close the deal might be gone for good. “We therefore ask growers not to contract with either Western Sugar under ownership of Tate and Lyle or with Tate and Lyle until the purchase is concluded or until it is determined the purchase should not go forward and the down payment and a substantial portion of the incurred costs have been refunded.”
The Board said it had presented Tate and Lyle with a completed financial plan that will meet the substance of their requirements. “We believe their refusal to complete the purchase at this time will be an act of bad faith. We ask growers to be patient and to have solidarity with their co-op at this time.”