Fyffes is to post a circular to shareholders on the proposed demerger of its general produce and distribution business into a new, separately quoted company to be fully owned by the company's shareholders.
Fyffes inicated it will cancel its listing on the official markets in Ireland and the United Kingdom and gain admission to trading on the IEX and AIM markets, when the proposed demerger goes ahead.
In a statement to the Irish Stock Exchange , the company said it has contacted shareholders in connection with the proposed demerger of its produce and distribution businesses to a newly formed company, Total Produce.
Assuming approval of the proposals at the extraordinary general meeting on December 5, all eligible shareholders on the Fyffes share register on December 29, will receive one new share in Total Produce for each existing Fyffes share held.
The Board said it believed the demerger would enable both businesses to pursue independent growth strategies. Fyffes will be left with the tropical produce division.
Fyffes said that if the demerger had taken place on December 31 2005, Fyffes' turnover would have been reduced by approximately €1,676m, and its operating profit would have been lower by approximately €32m.
If the demerger had taken place on June 30 2006, Fyffes' total net assets at that date would have been reduced by €164m to €262m.
Fyffes said it is intended that Total Produce will commence operations on December 31 2006 with €10m net debt.
The new company Total Produce will also pay the final consideration to buy the remaining 40% of the Everfresh Group in May 2007, subject to a maximum payment of €49.6m. As of June 30 2006, Fyffes said it had accrued €35m in this regard.
Fyffes shares closed down one cent to €1.68 in Dublin this evening.
