Governor Downsizes U S Sugar Buyout Plan In Hopes Of Saving It

Gary Cooper Citrus, Florida, Sugar

Amidst photos of the “River of Grass” Florida Governor Charlie Crist this week explained a plan to reduce the size of the proposed U S Sugar purchase plan in hopes of saving the deal. The battered economy has lots of folks asking lots of questions about the reasoning, and the timing of the deal. Meanwhile, U S Sugar put out its news release on the matter quickly following the Governor’s press conference, and that release is as follows:
CLEWISTON ?April 1, 2009 (U S Sugar Corp) U.S. Sugar Corporation agreed to the proposed amended terms for the South Florida Water Management District?s acquisition that allow the District to acquire the Company’s land in two smaller phases and enable the Company to continue its operations.

The Governor’s bold vision for our property remains the same as announced in June. “We?re just being realistic in light of the economy– the acquisition will be made in two steps rather than one,” said Robert Coker, Senior Vice President, Public Affairs. “Even so, this historic acquisition still provides great benefits for the environment and a fair value for our Company.”

“With property values and tax revenues falling, this became a matter of what the District realistically could afford,” Coker said. “Obviously, neither party gets everything they wanted at closing, but over the next ten years the state can still acquire a large portion of historic Everglades and U.S. Sugar property can still provide the legacy footprint for significant restoration,” Coker said.

Under the proposed amended terms, the SFWMD would acquire an initial 72,500 acres of the Company’s land for approximately $530 million with an option to acquire the remaining 107,500 acres for up to ten years.? The company would continue to farm the 72,500 acres through a 7-year lease that may be extended under certain circumstances.

“The two-step approach provides a greater degree of certainty for our businesses, our employees and also our communities by keeping our farming and processing operations viable,” said Robert Coker, senior vice president, public affairs.

Coker said that U.S. Sugar will lease back the cane land for $150 per gross acre for the initial seven-year period. The SFWMD can take 32,000 acres of citrus land with one year?s notice. The SFWMD also may take up to 10,000 acres of cane land in the first ten years with a two-year notice for approved and funded projects.? Up to 3000 acres of transition lands may be transferred to local municipalities immediately if the land is not in sugarcane production.

“Both U.S. Sugar?s Board of Directors and the SFWMD?s Governing Board must still approve these proposed amended terms,” Coker said.