TSB gets approval for investment in Swaziland October 17, 2006

The South African Competition Commission approved the acquisition by Transvaal Sugar Limited (TSB) of a 25.85% stake in Royal Swaziland Sugar Corporation (RSSC) from Actis, an equity investor in emerging markets. This approval signals support for regional investment and recognizes the potential benefits thereof.

The deal, announced earlier this year, was subject to a due diligence investigation,  and approval from the Competition Commission. The transaction is underway and the finalisation of the deal will see TSB and RSSC sharing resources to ensure a hub of low cost production of high quality sugar.

Hennie Snyman, chief executive officer of TSB, said: “There are many operational synergies between TSB and RSSC and we are looking forward to working with stakeholders and management. We are also looking forward to sharing expertise, and technical skills of TSB’s subsidiary, Booker Tate Limited, to improve profitability and focus on being a world leader in low cost production. The acquisition is in accordance with TSB’s strategic intention..

RSSC is the largest sugar business in Swaziland with two mills, with a combined throughput of 700 tonnes per hour, and an agricultural division that operates a 20,000 hectare irrigated sugar cane estate.  RSSC also produces refined sugar and ethanol and is listed on the Swaziland Stock Exchange.

TSB, situated in Mpumalanga, is a wholly-owned subsidiary of Remgro Limited, a diversified company listed on the JSE Securities Exchange South Africa and operates two sugar mills, a refinery and a packaging plant, sugar estates, cane and sugar transport and an animal feed division.

Actis has been an investor in RSSC since 1979. Peter Schmidt, a managing partner of Actis, said: “TSB will be a strong shareholder for RSSC and will be able to add value.  We are confident that TSB will replace Actis as a suitable partner and support RSSC in the challenging environment that it faces as a result of proposed EU sugar reform and the current strength of the li-Langeni.”

TSB believes RSSC has the capability to be a low cost producer and will be in a position to increase its preferential access to the EU once the EU sugar reform has taken place.