Imperial Sugar Company (“Imperial”; NASDAQ: IPSU), the Sugar Growers & Refiners (“SUGAR”) of Breaux Ridge, La., and Minneapolis-based Cargill today announced the successful closing of a $100 million tax-exempt bond offering to finance the new construction of the largest sugar refinery in the United States, creating about 500 construction jobs and 145 permanent jobs in the New Orleans-Baton Rouge area.
The refinery will be built adjacent to Imperial’s existing Gramercy facility in the Gulf Opportunity Zone, under a federally-backed and state-run program designed to help the region recover from Hurricanes Katrina and Rita. The refinery is expected to cost $120 million. Imperial, SUGAR, and Cargill will each contribute $30 million to fund construction of the refinery and for operations. The three will equally own the refinery.
The bonds are rated Aa3 by Moody’s Investors Service on the basis of a letter of credit from Natixis, acting through its New York Branch (“Natixis”), and were underwritten by Thornton Farish Inc. and Natixis Securities North America Inc. ING Capital LLC was Sole Lead Arranger, Sole Bookrunner and Syndication Agent. Natixis was Administrative Agent and Union Bank, N.A. was Documentation Agent. Local involvement in the financing was through First South Farm Credit.
“Construction of the refinery will begin immediately,” said Lonnie Champagne, chief executive officer of SUGAR. “We expect that the new facility will be in operation early in 2011.”
“Having the new facility on our Gramercy site will provide the joint venture the infrastructure and operational capabilities needed to get the new facility into production smoothly,” said John Sheptor, president of Imperial. “We’ll also have the flexibility of operating parts of the existing refinery during the transition.”
“The new facility will be good for the long-term viability of the sugar industry,” said Alan Willits, president of Cargill Corn Milling. “It links SUGAR’s cooperative of growers and mills, Imperial’s branded sugar marketing experience, and Cargill’s marketing capabilities to serve customers and consumers.”