| "What the letter does is tell us what amount of
people are interested out there." - Don Steinbeisser
Area sugar beet growers will receive a letter this week regarding a
possible buyout of Holly Sugar.
The letter opens, "You have undoubtedly heard rumors about the
possible willingness of Imperial Holly to sell its Rocky Mountain sugar
factories to its growers. This will confirm the rumor and will indicate to
you that the leaders of the local associations have formed a committee for
the purpose of exploring a possible buyout. Each of the grower
associations is represented on the committee. These growers have expressed
a willingness to serve pending the buyout and until an appropriate legal
structure can be put in place. There are many growers who could serve, and
we hope the membership of the associations will support these preliminary
decisions in order that this matter might move forward."
The Holly Sugar Committee is exploring the possible acquisition of the
Holly factories in Sidney, Worland, Wyo., and Torrington, Wyo.
Don Steinbeisser, president of the MonDak Beet Growers Association,
said the process began during a meeting at Holly's national headquarters
in Sugarland, Texas a year ago. "The company asked us if we were
interested in the three Rocky Mountain factories," Steinbeisser said.
Confidentiality papers were signed so that the growers could examine
financial spreadsheets of the company for the past five years.
Steinbeisser said no price has been set to buy the factories.
"We've done some work on that (determining an offer)."
The letter reads, "Even though we do not know the financial
arrangements, we are confident that we will have to finance the
feasibility study and the investigation to determine whether a buyout is
in the best interests of all concerned."
The letter also reads, "While we are organizing and conducting
preliminary discussions with Imperial Holly, it is very important that we
ascertain the attitude of growers with respect to a possible buyout. It is
premature to know the cost to the growers of acquiring these factories and
the financial arrangements. However, based on what we know, we would
expect that the cooperative would borrow approximately two-thirds of the
cost and the growers would have to invest approximately one-third of the
cost."
Steinbeisser said the letter will be a good gauge of growers' and
landlords' opinions. "What the letter does is tell us what amount of
people are interested out there," he said. The letters are due back
Dec. 29.
Each recipient of the letter is asked to give $2 per acre planted
during crop year 2000. Each person that donates will be placed on a
primary mailing list and will receive all future communications and be
invited to all grower meetings.
"If there's not a lot of interest, we'll probably drop it,"
Steinbeisser said.
The letter reads, "Once we ascertain that there is sufficient
interest in a possible buyout, we will determine whether to form our own
cooperative, join with others or to pursue some other plan. We will then
enter into negotiations with Imperial Holly to see if an affordable buyout
is possible. We will perform a due diligence investigation concerning the
condition of the factories, environmental risks, etc. Once all of those
efforts have been completed, we will then be in a position to have grower
meetings throughout the growing regions to explain the entire transaction
to the growers and to obtain the grower investments. In the meantime, we
want to be sure that the factories operate and that the grower base
remains stable."
Steinbeisser said buying the factories when sugar prices are low might
be a good move. "When sugar prices are high, it may not be for
sale."
Russ Fullmer, ag manager at Holly Sugar, said, "As a local
management team, we're very interested (about what's happening)." But
he said Holly Sugar doesn't have an official comment at this point.
Terry Cayko, vice president of the MonDak Beet Growers Association,
said he's heard a few early comments about the proposal in the Fairview
area.
"It's just hitting the coffee shops now," Cayko said Monday.
"It's something they need to talk about. They're talking about their
future."
Cayko said the mood of the growers seems to be "kinda
cautious."
"I think they're still forming their opinions," Cayko said.
Steinbeisser asks growers to take their time to make decisions.
"Each grower and landlord needs to take a good look at this,"
Steinbeisser said. "Don't make any rash decisions. Do what's best for
your operation." |