Latest news with #Wilmar
Business Times
3 days ago
- Business
- Business Times
CGSI downgrades Wilmar, lowers price target amid heightened regulatory risk from Indonesia
[SINGAPORE] CGS International (CGSI) analyst Jacquelyn Yow downgraded Wilmar international from a 'hold' to a 'reduce' call in her Jul 18 report, with a lowered target price of S$2.70 from S$3.15. This is due to increasing uncertainties from Indonesia over land confiscation issues and ongoing investigations on alleged cases related to palm oil and rice, cited the analyst. Yow said: 'While the contribution from Indonesia's rice business to Wilmar's overall operating profit is likely not significant, recent developments in the country – including land confiscations and alleged corruption cases – have introduced increasing uncertainty for the group.' Earlier on Jul 15, Indonesia Business Post reported that the Indonesian National Police Food Task Force had launched an investigation into four major rice producers including Wilmar. This was over allegations of mislabelling, where lower-grade medium-grain rice was blended with premium rice and sold as higher quality. Wilmar also separately placed a security deposit of 11.8 trillion Indonesian rupiah (S$929 million) with the Attorney General's Office on Jun 17. This was linked to an ongoing legal appeal concerning alleged corruption in the issuance of palm oil export permits in 2022. 'We estimate that the potential financial impact of this to be nearly 2 per cent of its total net profit for FY2025, with the potential loss from the interest income amounting to US$729 million,' she said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up These regulatory issues in Indonesia, coupled with the rising volatility of commodity prices from the US tariffs and geopolitical tensions, are likely to continue to cast a shadow over Wilmar's near-term outlook, noted the analyst. 'As such, we cut our FY2025 to FY2027 forward core net profit by 0.4 to 12.5 per cent, factoring in lower margin for the feed and industrial segment due to lower soybean crushing margin, and a lower palm refining margin,' the analyst said. Q2 earnings expectations For the second quarter of 2025, CGSI's Yow expects the group to report a net profit of US$260 to US$270 million, down from US$343 million in the previous quarter, and year on year from US$278 million in Q2 2024. 'This is mainly driven by lower margin for its feed and industrial segment, due to a decline in soybean crushing margin despite better demand for soybean meal (in light of cheaper pricing than other animal feedstocks),' she said. In addition, the analyst said that the palm oil refining margin is likely to be lower in Q2 to Q4 FY2025, largely due to the revised Indonesian export levy which had resulted in lower refining margin. She also said the overall sales volume of its food product segment remained muted due to lower demand coupled with high promotional expenses, especially for the consumer product sub-segment, which may result in a lower margin. Her report in particular cited 'overall soft consumer consumption in China' as a factor affecting the sales volume in this segment. Increasing stake in AWL Agri Business Earlier on Jul 17, Wilmar had announced plans to acquire up to a 20 per cent stake in AWL Agri Business, formerly known as Adani Wilmar, from Adani Commodities, for 275 rupees per share. The transaction is part of the option agreement signed in December 2024, which had set a maximum price of 305 rupees per share, and came after Adani Commodities said it will exit the venture joint venture. While the final structure is under negotiation, Wilmar has stated it will acquire no less than 11 per cent and no more than 20 per cent of AWL's equity under this agreement. Yow said that the agreed purchase price of 275 rupees per share reflects an approximate 10 per cent discount to the previously capped price, indicating a more favourable valuation outcome for Wilmar. 'The deal strategically enhances Wilmar's control and long-term growth visibility in India, while also marking Adani Group's full exit from the fast-moving consumer goods space as it shifts focus towards infrastructure and energy. We believe the acquisition helps reinforce Wilmar's presence in India's fast-growing packaged food and edible oil market,' she wrote in her Jul 18 report. The analyst added that she view this as a 'prudent move' by the group to ensure continuity and support Wilmar's long-term ambitions in the market, given the difficulty of replicating a local partnership of Adani's scale. Following the transaction, Wilmar's effective stake in AWL would increase from 44 per cent to around 55 to 64 per cent, resulting in AWL becoming a subsidiary and enabling full financial consolidation. 'We remain neutral on the transaction, as the purchase price implies a FY2025 P/E of around 29 times – a premium to global peers – despite a relatively moderate earnings growth profile,' said the analyst. 'We reckon that the near-term operating conditions in India's consumer staples sector remain soft, which may limit upside in the immediate term,' she added. As the deal is still under negotiation, however, Yow does not expect any material impact on Wilmar's FY2025 forward financials. 'That said, based on AWL's FY2025 net profit of around US$145 million, full consolidation could potentially increase Wilmar's net profit by nearly 10 per cent moving forward,' she said.
Time of India
6 days ago
- Business
- Time of India
FMCG exit: Adani to get Rs 11,000cr for 30% JV stake
File photo MUMBAI: Adani Enterprises will divest its remaining 30.4% stake in AWL Agri Business to Wilmar International of Singapore and institutional investors for an estimated Rs 11,080 crore, marking its complete exit from one of its earliest business ventures established at the turn of the new millennium. Earlier in Jan, it divested about a 14% stake in AWL Agri Business (previously Adani Wilmar) for Rs 4,856 crore through the offer for sale (OFS) route, signalling its withdrawal from non-core infrastructure operations. The Ahmedabad-based Adani Group already disposed of its interests in Adani Capital, Adani Housing, and the Myanmar port project. On Thursday, AWL announced that Wilmar will buy Adani Enterprises' 20% stake in the Fortune edible oil and Kohinoor basmati rice maker for Rs 7,148 crore, raising its ownership to around 64% from the current 45%. Additionally, institutional investors will buy Adani Enterprises' remaining 10.42% stake for an estimated Rs 3,934 crore in a separate transaction. The share transfer price is set at Rs 275 per share for both Wilmar and institutional investors, compared to the Jan OFS price of Rs 276.5. During Thursday's trading, AWL shares on BSE rallied by over 8% to Rs 284 intraday, closing at Rs 278, up 6.1%. Following the completion of these transactions, subject to Wilmar securing anti-trust approvals, AWL will cease to be an associate company of Adani Enterprises. Adani Enterprises, the group's flagship company, intends to utilise the proceeds from the AWL divestment in airports, green hydrogen, roads, and copper operations, where it identifies significant growth potential. The company previously said that airports, rather than FMCG, will emerge as a 'full-blown consumer story'. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
New Indian Express
6 days ago
- Business
- New Indian Express
Adani Enterprises cedes control of AWL Agri to Wilmar, sells 20% more for Rs 7,150 crore
MUMBAI: The Adani Group has fully exited AWL Agri Business, formerly Adani Wilmar, by selling an additional 20% stake to its Singapore-based joint venture partner Wilmar International for Rs 7,150 crore, or at Rs 275 per share. The latest deal follows a 13.5% stake sale in January this year at the same price and hands Wilmar majority control with a 65% holding in the company. The remaining 10.42% stake held by Adani Commodities, a subsidiary of Adani Enterprises, will be sold to a group of pre-identified investors arranged by Wilmar, Adani Enteprises had said in a statement Thursday. Adani Enterprises, the flagship company of the Adani Group, had in December 2024 announced its decision to exit the joint venture with Wilmar.
India.com
6 days ago
- Business
- India.com
Gautam Adani's BIG move, begins exit from FMCG venture, sells major stake in AWL Agri Business in deal worth Rs 71500000000 to...
Gautam Adani (File) Adani Enterprises Ltd (AEL) announced on Thursday that it has agreed to sell a 20 per cent stake in AWL Agri Business Ltd to Lence Pte Ltd, a part of Wilmar International. The deal is priced at Rs. 275 per share, and the total value of the sale is Rs. 7,150 crore. With this move, Wilmar will now become the majority owner of AWL, holding 64 per cent of the company. Right now, Adani Commodities LLP, a unit of AEL, owns 30.42 per cent of AWL. This sale is part of Adani's ongoing plan to sell its entire 44 per cent stake in AWL and exit the FMCG (fast-moving consumer goods) business that it had jointly run with Wilmar. Agreement between Adani Commodities LLP and Lence Pte. Ltd In December 2024, Adani Commodities LLP (ACL) and Lence Pte. Ltd, a part of Wilmar International from Singapore, signed an agreement. As part of this deal, both sides gave each other the option to buy or sell Adani's shares in Adani Wilmar Limited (AWL) at a later date. They agreed on a price cap of Rs. 305 per share. At that time, both companies owned 44 per cent each in AWL, together holding 88 per cent of the company. In January 2025, Adani sold 13.5 per cent of its shares in AWL for Rs. 276.51 per share, raising Rs. 4,855 crore. This was done to follow rules that require more of the company's shares to be held by the public. After that sale, Adani still held around 30.42 per cent in AWL. Now, out of this, Adani plans to sell 11 per cent to 20 per cent to Lence. The rest will be offered to strategic partners and investors that Wilmar brings in. The final 10.42 per cent of Adani's stake will also be sold to selected investors before the deal with Lence is finished. Once all these sales are done, Adani will completely exit AWL. That means AWL will no longer be linked to Adani Enterprises in any official way. (With IANS inputs)
Business Times
6 days ago
- Business
- Business Times
Wilmar to acquire up to 20% of Mumbai-listed joint venture with Adani
[SINGAPORE] Agri-specialist Wilmar International has agreed to acquire up to 20 per cent of the shares held by India's Adani Commodities in the two companies' joint venture (JV), for 275 rupees per share. Wilmar's wholly owned unit Lence will purchase a maximum of 259.9 million shares in the Mumbai-listed JV, AWL Agri Business (formerly known as Adani Wilmar). The move comes after Adani Commodities announced its exit from the JV in December 2024. AWL shares rallied following the announcement on Thursday (Jul 17), rising 6 per cent to trade at 278.15 rupees as at 3.20 pm India time. Adani Commodities will also sell its remaining 10.42 per cent stake in AWL to 'a set of pre-identified investors' prior to the transaction with Wilmar. After the deal, Adani Commodities will have completely divested itself of the JV, while Lence's stake in AWL will range from 54.94 per cent to 63.94 per cent. At the price of 275 rupees per share, Wilmar expects to recognise a gain on deemed disposal of about US$1.23 billion, with a corresponding increase in net assets of US$1.33 billion. Depending on the final number of shares acquired, the group also foresees goodwill on consolidation that will result in a reduction in net tangible assets. Assuming that Lence acquires an 11 per cent stake in AWL for 275 rupees a share, Wilmar will record negative net tangible assets attributable to AWL of about US$0.36 billion. This is based on AWL's audited financial statements as at Mar 31, 2025. Wilmar shares on the Singapore bourse ended Thursday at S$2.99, up 0.7 per cent.
