NutraCea Completes Sale Of Cereal Ingredients Business
NutraCea, a producer of stabilized rice bran and other food and nutritional products, has completed the sale of its cereal ingredients business and certain related equipment to Kerry, a food ingredients company, on March 9, 2010 for $3.9m.
In addition, NutraCea received $272,000 for inventory related to its cereal ingredients business. A finder's fee in the amount of $200,000 was paid from the purchase price.
At the closing, Kerry and NutraCea entered into a Toll Processing agreement whereby until the earlier of the date Kerry begins production of cereal products using the assets purchased under the sale or October, 31, 2010, NutraCea will produce cereal products for Kerry at its Dillon, Montana plant.
NutraCea has also agreed that it will not process or sell certain cereal products for a period of five years from the date of the closing.
John Short, chairman and CEO of NutraCea, said: “We are pleased to have completed the sale of our cereal business to Kerry Inc. It represents a first but significant step in the execution of our strategy aimed at selling non-core assets to pay down debt and refocus on our core businesses of stabilized rice bran, defatted rice bran, rice bran oil and nutraceutical and pharmaceutical derivatives of SRB.”
On November 10, 2009 NutraCea filed for court supervised protection to restructure its operation under Chapter 11 of the US Bankruptcy Code.
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