| A group of Michigan sugar beet growers is preparing to
become a group of Michigan sugar producers.
The Michigan Sugar Beet Growers Inc., a grower-owned
cooperative formed last August, announced Friday it has signed
a letter of intent with Sugarland, Texas,-based Imperial Sugar
Co. to buy Michigan Sugar Co., which owns four sugar factories
in Michigan.
Terms of the sale, expected to close around Sept. 1, were
not released.
"We are pleased that we have been able to reach
agreement on the letter of intent," said Richard Maurer
of Ruth, who is chairman of the board for the co-op.
"Growers will now be able to plant their 2001 crop
with the confidence that the factories will operate and
process this year's sugar beet crop.
Michigan Sugar has processing plants in Carrollton, Caro,
Croswell and Sebewaing.
Michigan Sugar Beet Growers Inc. is a legal entity formed
for the sole purpose of pursuing the purchase of Michigan
Sugar, said Richard E. Leach Jr., executive vice president of
the Great Lakes Sugar Beet Growers Association.
That association represents Michigan Sugar's 1,400 growers
in the Thumb area, central and southeastern Michigan and
Ontario, Canada.
"None of Michigan Sugar's growers are members of the
co-op at this time," Leach said. "We will have a
general stock offering after the deal has been closed."
Leach said each share in the new co-op will be sold for
$200 and members will be required to plant one acre per share
purchased. He said there will be no minimum or maximum number
of shares required.
Leach said in recent years, Michigan Sugar has contracted
for between 127,000 and 132,000 acres per year. The new co-op
would have to sell more than 25 million shares to meet that
quota. The average cost per member would be more than $18,000.
"The success of this venture will be based on our
growers' willingness to participate," Leach said.
"We are confident that the growers will see this as a
wonderful opportunity to take control of their industry and a
way to guarantee that there will be plants in operation where
their beets can be processed."
Imperial Sugar Co. filed for Chapter 11 bankruptcy
protection in January. The company refines raw can sugar at
four plants in Florida, Georgia, Louisiana and Texas and
produces beet sugar at 11 plants in California, Michigan,
Missouri and Wyoming.
Imperial purchased Michigan Sugar in 1997 from Savannah
Foods and Industries Inc. of Savannah, Ga., and formed the
largest domestic refiner and processor in the United States.
The company first expressed interest in selling Michigan
Sugar Co. in January 2000.
According to a press release issued by the Michigan Sugar
Beet Growers, in the event the closing of the sale is delayed
beyond Sept. 1, the letter of intent provides for the
cooperative to lease the four Michigan Sugar factories to
process the 2001 crop.
The letter of intent also deals with the procedures to be
followed by growers to receive the balance of their 2000 crop
payments.
The cooperative will send a letter to all growers with
details of the buyout and the timing of grower meetings, the
press release stated.
- Rob Clark is business editor for The Times. He can be
reached at 894-9642 |