S. Africa's Tongaat says independent expert deems conditions fit for starch business sale

Sept 22 (Reuters) - South Africa's Tongaat Hulett TONJ.J said on Tuesday that an independent expert looking into the sale of its starch business to Barloworld BAWJ.J had deemed the conditions fit for the deal going through.

Both the companies had been at loggerheads for months, unable to reach an agreement over a condition set during the deal signing in February when sugar producer Tongaat agreed to sell the business to the equipment maker Barloworld for 5.35 billion rand ($290.70 million), including debt.

Barloworld said in May the COVID-19 pandemic caused "material adverse changes" (MAC) to Tongaat's starch business, and would likely to lead to a drop of about 82.5% in its full-year earnings before interest, taxes, depreciation and amortization.

Tongaat said on Tuesday independent expert Rothschild & Co determined it was reasonably likely that the core earnings of the starch business for fiscal 2021 would be more than 82.5% from the year earlier, and that a MAC has not occurred.

In a separate statement, Barloworld said the deal was expected to be completed once the conditions are fulfilled.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Ramakrishnan M.)

((abyjose.koilparambil@thomsonreuters.com; +91 (0)8061822683;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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