February 15, 2018 / 11:00 AM / 6 months ago

UPDATE 1-ChemChina's Syngenta sees $5 bln bond sale in weeks, keen on M&A - CFO

* Syngenta sees $5 bln bond within weeks

* Sale hinges on court deal, confirmation of debt rating

* Keen on M&A, says regulators are being restrictive (Adds comments from CFO, details throughout)

By John Miller

ZURICH, Feb 15 (Reuters) - ChemChina’s Syngenta unit aims to sell around $5 billion in bonds within weeks after it clinches a settlement with U.S. farmers who had sued over genetically engineered corn, Chief Financial Officer Mark Patrick told Reuters.

Patrick also said in an interview on Thursday the Swiss crop protection and seeds company was interested in assets coming up for sale via anti-trust disposals amid industry consolidation.

But he said regulators “have been quite restrictive in terms of who can acquire what”.

Syngenta in late 2017 scrapped a $7 billion bond — intended to help finance ChemChina’s $43.5 billion acquisition of the Basel-based company that was completed last May — as the lawsuits by farmers soured potential investors.

The case stemmed from Syngenta’s decision to commercialise a genetically modified strain of corn before China approved importing it.

Though Syngenta agreed to settle the case in September for around $1.5 billion, according to a person familiar with the deal, S&P put Syngenta’s BBB- on ratings watch amid uncertainty over the details of the agreement. Fitch followed suit.

Patrick said plaintiffs’ lawyers are negotiating final terms, with a judge likely to sign off “in coming days”. In the meantime, he said, Syngenta has been meeting ratings agencies to allay concerns over its balance sheet and debt structure.

“I would envisage that we would be in a position to come back to the bond market in the coming weeks, hopefully before the end of Q1, maybe not with a $7 billion bond, probably more likely in the $5 billion range,” Patrick said.

“Obviously a key component of that is finalisation of the (legal) settlement and confirmation from S&P and Fitch of the investment-grade rating,” he added.

Syngenta reported 2017 sales slipped 1 percent to $12.65 billion, hurt in particular by weakness of crop protection products in Latin America. “2017 was a tough year,” Patrick said.

Syngenta has been making acquisitions, including the Nidera crop seeds business of Chinese grains trader COFCO International.

It may be a suitor for Bayer’s global vegetable seeds business that the German company is unloading to win approval of its own $63.5 billion purchase of U.S.-based Monsanto.

“I think certainly the industry consolidation is providing a number of opportunities that are of strategic value to us and clearly we would be very interested in acquiring some of those,” Patrick said.

He said regulators will continue to play a big role in determining what happens.

For instance, DuPont had to buy a unit of FMC Corp and sell a crop protection business to FMC to win European Union approval for its $130 billion merger with Dow Chemical.

“As to whether we’ll be in a position to acquire is somewhat down to the regulators, as we saw with the Dow-Dupont sale to FMC,” Patrick said. “M&A is important to us, but it’s not just limited to those assets that are coming out of industry consolidation.” (Editing by Michael Shields)

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