Margarita Louis-Dreyfus Secures Financing to Buy Out Family

(Bloomberg) -- Margarita Louis-Dreyfus, the Russian-born heiress who controls the eponymous agricultural commodities trading house, secured financing to buy out remaining family members and will consider strategic partnerships.

Louis-Dreyfus revealed few details about the financing deal. A company spokeswoman said the financing was “secured via a loan,” but declined to provide terms or who the lender is, citing confidentiality agreements.

The announcement on Wednesday resolves a major question that’s been hanging over the company. The chairwoman is obligated to buy the family stakes by the end of the year worth about $900 million under a previous arrangement, and has been squeezing the company for cash.

The company spokeswoman said Louis-Dreyfus and her family trust Akira “will meet its financial obligations in compliance with calendar and payment terms,” without providing further details.

The financing deal will allow LDC to implement “ambitious growth plans,” Louis-Dreyfus said in a statement.

Margarita Louis-Dreyfus Secures Financing to Buy Out Family

The stock purchases are part of the chairwoman’s broader plan to take almost full ownership. Louis-Dreyfus must buy shares tendered by relatives over certain periods under a deal signed by the family years ago. After the relationship between the billionaire and the relatives soured, they tendered increasingly larger amounts of equity in the trading house, forcing Louis-Dreyfus to spend hundreds of millions of dollars buying shares.

In the past, Louis-Dreyfus has taken on debt to fund family share purchases and pledged her own shares to back $475 million in loans from Credit Suisse Group AG. If the financing is from a bank, she’ll eventually have to come up with more cash to repay the debt.

“I also wish to keep all options open in terms of strategic partnerships,” Louis-Dreyfus said. That wording suggests she may be open to selling a stake, opening the trading house to outside investors for the first time since it was founded more than 150 years ago.

The trading house has faced intense turmoil this year, including the departure of top leadership and declining profits.

“LDC does not intend to depart from its long-standing dividend practice, consisting of a payout of up to 50 percent of net earnings and ad hoc extraordinary dividends related to strategic divestments,” she said in the statement, marking the first time the company has publicly expressed its dividend policy.

The policy is significantly richer than some of its rivals. For example, Cargill Inc., the world’s largest agriculture commodities trading house, pays 20 percent of average net income to the Cargill and McMillan family owners.

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