IOI, Irish food company Kerry in JV for infant formula business

by **Cals** Wed 24 Jun 2015, 03:43

IOI, Irish food company Kerry in JV for infant formula business

KUALA LUMPUR (June 23): IOI Group Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) has formed a joint venture with Irish food company Kerry Group Plc to develop and market the nutrition lipid Betapol business.
Betapol is a palm oil-derived nutritional additive that is used to fortify infant milk powder globally.
IOI said in a filing to Bursa Malaysia today that Betapol, one of LC Group BV’s groundbreaking innovations, will be integrated into Kerry’s global nutritional ingredients portfolio, backed by global applications, marketing and sales support.
In the Bursa filing, IOI said that its wholly-owned subsidiary Loders Croklaan Group B.V. (LC Group BV) has agreed to subscribe for 100 ordinary shares worth €1 each and €25 million (RM105 million) redeemable ordinary shares of EUR1, as would equal US$25 million, in LCK Nutrition Ltd (LCK).
“This follows from a restructuring to transfer the Betapol business (consisting business intellectual property, goodwill, contracts, sales book and records) from LC Group BV to LCK, for a total consideration of US$25 million (RM93.5 million),” it said.
IOI explained that LCK’s incorporation into LC Group BV as a wholly-owned subsidiary would facilitate the formation of a 50:50 joint venture (JV) with a subsidiary of Kerry Group, to develop and market the nutrition lipid Betapol business.
LCK was incorporated in Ireland on Feb 19, with an authorized share capital of €100 million, comprising 75 million ordinary shares of €1 each and 25 million redeemable ordinary shares of €1 each.
Kerry is a public food company headquartered in Ireland and is listed on the Irish and London stock exchanges.
IOI said pursuant to the proposed JV and once the transaction has been approved by the authorities, Kerry Group’s subsidiary will subscribe for 100 ordinary shares worth €1 each in LCK, representing 50% of the enlarged share capital of LCK for US$25 million.
“The proceeds shall be utilised for the settlement of the consideration via redemption of the redeemable ordinary shares of €1 each held by LC Group BV, for a euro amount equivalent to US$25 million,” said IOI.
Following the subscription by Kerry’s subsidiary, LCK would cease to be a wholly-owned subsidiary of LC Group BV, but become a jointly controlled entity of LC Group BV and Kerry’s subsidiary.
“Betapol will be integrated into Kerry’s global nutritional ingredients portfolio, backed by global applications, marketing and sales support.
“On or after the completion of the proposed JV, LC Group BV would continue to manufacture the Betapol product range for LCK.
“It will also source all raw materials and manage the quality of products, while LCK will be responsible for business development and innovation,” IOI said.
According to IOI, research shows that Betapol mimics the unique fat composition and structure of human milk fat, and is said to have a positive physiological effect on brain function and physical development, compared to standard vegetable oils used in infant formulas.
IOI added that none of the directors or substantial shareholders of its group or persons connected to them, has any direct or indirect interest in the deals.
Its shares fell two sen or 0.5% to close at RM3.99 today, giving it a market capitalisation of RM25.35 billion.