Sumitomo, Prima JV to buy Yarrow's Australian business for 4 billion yen, Reuters reports
By Paul McBeth
Aug. 21 (BusinessDesk) - Japan's Sumitomo Corp and Singapore's Prima will spend 4 billion yen buying the Australian business of failed Taranaki breadmaker Yarrows, according to media reports.
The Japanese trading firm and Singaporean flour miller will each invest 40 percent into a joint venture that will see them buy Yarrows' plants in Sydney and Perth, Reuters reported, citing the Nikkei business daily. Yarrows controls more than 90 percent of Australia's frozen dough market.
The acquisition will help Sumitomo grow sales to major customers in the US such as sandwich restaurant operator Subway, the report said.
Earlier this year Paul Yarrow lost his bid to keep control of the Australian business after the receivers exercised their right to oppose a court order that removed five directors from the Australian subsidiaries, which were excluded from the receivership.
Yarrows was put into receivership in May last year after failing to find a buyer for its Australian operations in a bid to reduce its debt and restructure the New Zealand business.
The baking business had total liabilities of $72.8 million on total assets of $76.7 million as at May 30 last year. The bulk of the baker’s debt was to Westpac Banking Corp, which is owed $55.2 million plus interest. As at May 29 this year, the bank was owed $48.6 million plus interest and costs.
Receivers BDO sold the New Zealand business to John Yarrow, one of the founding family's brothers who sold his stake in 2005 to sibling Paul. That resulted in a legal stoush over the purchase price, which Paul Yarrow claimed was too high, before reaching an out-of-court settlement.