Wilmar International Poised for Growth Amid Interest Rate Cuts and Improved Margins

ADANI Enterprises and Wilmar International are expected to start the sale of a minority stake in their consumer joint venture Adani Wilmar as early as next month to abide by shareholding regulations, according to people familiar with the matter.

 

The majority owners of Adani Wilmar are planning to sell a roughly 13 per cent interest in the company &ndash valued at about US$736 million based on Monday&rsquo s (Sep 16) closing price &ndash to comply with Indian securities laws, the people said, asking not to be identified discussing confidential information. Local regulations require at least a 25 per cent shareholding should be with non-founders within three years of listing.

 

Adani Wilmar&rsquo s stock climbed 2.1 per cent on the news, and closed 1.4 per cent higher on Monday. The shares have advanced 3 per cent this year, giving the company a market value of US$5.7 billion. The broader gauge S& P BSE Sensex has risen almost 15 per cent.

 

Since the flagship of billionaire Gautam Adani&rsquo s conglomerate and Wilmar hold almost 44 per cent each in Adani Wilmar, this 88 per cent overall shareholding needs to be pared down to 75 per cent by February when the three-year grace period ends.

 

The stake could be sold in one or two tranches by February and advisers will soon start meeting investors in the US, South-east Asia as well as India, the people said. Deliberations are ongoing and no final decisions have been made, the people said.

 

A representative for Adani Enterprises did not have any immediate comment when contacted by Bloomberg News, while Wilmar declined to comment.

 

Jefferies Financial Group, Nuvama Wealth Management and SBI Capital Markets are working with Adani Enterprises and Wilmar on their divestment plans, Bloomberg reported on Jul 18.

 

The sale will be a barometer of investor appetite for the consumer goods maker that&rsquo s just returned to profit. The ports-to-power conglomerate has begun tapping capital markets as it moves past the scathing short seller attack from Hindenburg Research in early 2023. Adani Group has denied the allegations from Hindenburg. Adani Energy Solutions raised US$1 billion through a share sale last month while Adani Enterprises is considering similar.

 

Established in 1999, Adani Wilmar has 23 plants in India and sells kitchen staples for Indians, including edible oil, wheat flour, rice, pulses and sugar. 

CANBERRA &ndash Workers at Australia&rsquo s largest sugar maker, Wilmar Sugar and Renewables, voted to accept a pay offer, the company said on Sept 13, ending a months-long industrial dispute that disrupted sugar production.

 

Wilmar Sugar is owned by Singapore-listed Wilmar International.

 

Wilmar Sugar&lsquo s eight mills churn out more than 2 million tonnes of sugar worth around US$1 billion (S$1.3 billion) a year, over half the country&rsquo s total, most of which is exported.

 

Industrial action from May delayed the start of the cane crushing season and led to several shutdowns after it had begun.

 

That raised the risk that the full harvest might not be processed before bad end-of-year weather made it impossible to bring in cane.

 

Fifty-five per cent of workers voted in favour of a three-year deal that gives more than 1,300 of them a one-off bonus, a 12 per cent pay increase by year-end and 4 per cent more in December 2025, Wilmar said.

 

&ldquo It draws a line under a period that impacted not only our business and our people, but the growers and harvesting operators who are so critical to the sugar supply chain,&rdquo a spokesperson for the company said.

 

Wilmar Sugar&lsquo s mills form the economic centre of communities on Australia&rsquo s hot and humid north-east coast, where sugar is a major industry.

 

&ldquo The deal doesn&rsquo t give us everything our members were asking for, but it&rsquo s a huge win for our members and the community,&rdquo said Australian Workers&rsquo Union official Jim Wilson.

 

A pay dispute at another mill, Tully Sugar, owned by Chinese conglomerate Cofco, also ended last month with workers accepting a deal.

 

&ldquo It&rsquo s great to have this issue finally resolved,&rdquo said Mr Owen Menkens, the chairman of Canegrowers, an industry group.

 

&ldquo It has dragged on for far too long, has delayed cane crushing across half of the industry, and caused great anxiety to growers and harvesting contractors,&rdquo he said.

 

Wilmar Sugar said that so far this crushing season its mills had processed about 6.3 million tonnes of sugar cane, around 40 per cent of the estimated crop.