Louis Dreyfus set to tap capital markets as buying spree looms
LOUIS Dreyfus, one of the world’s largest commodity firms, is set to issue bonds for the first time in its 160-year history.
The food trading house aims to raise the cash as it plans a series of acquisitions as part of a $7bn (£4.3bn) spending programme. It intends to raise its investment by 40 per cent over the next five years, compared with 2006-11.
The plan is the clearest sign yet that Dreyfus will continue on its own after a series of possible mergers failed to materialise.
Serge Schoen, chief executive, said the privately owned business will fund acquisitions through its cash flow and by tapping the capital markets.
“We have a strong balance sheet, but we want to diversify our sources of capital,” including “raising public debt through bonds”, he told the Financial Times. The bond offering could be around $500m – although Dreyfus has not put a figure on it publicly – and take place this summer.
Schoen also said an initial public offering was possible for its LDC-SEV sugarcane subsidiary in which the firm has a 65 per cent stake.
Margarita Louis-Dreyfus said she ruled out a listing for the family firm, in which she holds a majority stake through a trust set up after the 2009 death of her husband, Robert Louis-Dreyfus. Her main goal is “to ensure the long-term survival of the company, and the name of the company”, she said.
Merger talks between Dreyfus and smaller Singaporean rival Olam International failed last year.
In March commodities giant Glencore sealed a £3.9bn deal to buy Canadian grain handler Viterra.