Chocolate company Petra Foods has agreed to sell its entire cocoa ingredients division for US$950 million (S$1.15 billion), leaving it with only its branded consumer goods unit.
The move will slice off a large profit contributor although analysts remained upbeat on the firm's prospects while shareholders reacted by sending Petra's shares soaring more than 20 per cent on wednesday.
Zurich-based chocolate giant Barry Callebaut, which produces the Van Houten brand of cocoa drinks, is buying the cocoa ingredients business.
It will get seven Petra cocoa ingredients factories - in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France - and major sales offices in Singapore, the Netherlands and the United States.
Much of the net proceeds will be used to pay down Petra's debt, with the rest - about US$300 million - retained to finance growth in the branded consumer division.
Part of the proceeds may be distributed to Petra's shareholders, said a company statement yesterday. But chief executive John Chuang told a briefing yesterday that it is "still too early" to determine if a special distribution will be paid out.
Petra will enter a long-term supply agreement with Barry Callebaut to purchase cocoa ingredients to ensure there is minimal disruption to its branded consumer division.
The sale is subject to shareholders' approval but the vote is essentially a done deal.
Mr Chuang and his wife have agreed to use their 51 per cent Petra stake to vote for the sale, which needs a simple majority to pass.
Regulatory approvals - including approvals under antitrust and competition laws of the European Union and the US - are also needed.