SunOpta to apply $64 million asset-sale funds to asset-based facility

By Devika Patel

Knoxville, Tenn., Feb. 26 – SunOpta Inc. is selling its specialty and organic soy and corn business and using the proceeds to help reduce debt and move capital around.

“The sale of our specialty and organic soy and corn business is consistent with our portfolio optimization strategy designed to simplify the business, invest where structural advantages exist, and exit businesses or product lines where the company is not effectively positioned to drive long-term profitable growth,” interim chief executive officer Katrina Houde said in the company’s fourth quarter and full year ended Dec. 29, 2018 earnings press release on Tuesday.

“This decision allows us to reduce debt and redeploy capital to further enhance our growing consumer products and international organic sourcing platforms,” Houde stated.

The company expects to net $64 million from the sale, with the proceeds to first be applied toward paying down debt under the company’s first lien global asset-based credit facility.

“Gross proceeds on the sale [of the soy and corn business] were $66.5 million and we expect net proceeds to be approximately $64 million,” vice president and chief financial officer Robert McKeracher said on the company’s earnings conference call on Tuesday.

“The net proceeds will initially be applied against our first-lien global asset-based credit facility which, on a pro forma basis, would lower total debt as at Dec. 29, 2018 to approximately $445 million,” he said.

As of Dec. 29, 2018, SunOpta’s balance sheet reflected total debt of $509.2 million and total assets of $896.7 million.

Adjusted EBITDA was $9.1 million in the fourth quarter of 2018, compared to $9.4 million in the fourth quarter of 2017.

SunOpta is a Toronto-based company focused on organic, non-genetically modified and specialty foods.

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