We recently discussed the U.S. Sugar ESOP Issues. Florida to Buy U.S. Sugar's Land To Aid Everglades discusses how Florida is purchasing land from U.S. Sugar Corp. and leasing it back for the next six years before turning over the land for conservation purposes, effectively shutting down the company:
The state of Florida, stepping up its efforts to restore the Everglades wetlands, offered to purchase 300 square miles of land now used for sugar-cane production for $1.75 billion from U.S. Sugar Corp., effectively moving to shut down the largest grower of the crop in the U.S.The Clewiston, Fla.-based company and the South Florida Water Management District on Tuesday signed a "statement of principles" that would allow U.S. Sugar, which has farmed the land since 1931, to continue growing cane and producing sugar for the next six years. If final terms are settled as expected in the coming months, the company would then turn over the land for conservation purposes at the end of that period.
The state plans to pay $50 million in cash and finance the rest of the purchase's $1.7 billion through debt.
The article also notes the presence of the ESOP and the fact that the offer was compelling enough for the board of directors to proceed, even if it meant the end of the company:
The private company -- owned by descendents of its founder, Charles Stewart Mott, and an employee-ownership plan -- had invested more than $500 million in recent years to upgrade its facilities on the land and had no intention of shutting down until Gov. Crist, in meetings with executives in recent months, "suggested he buy us out," said Robert Coker, senior vice president of U.S. Sugar.
The terms of the state's offer, he added, were compelling enough for U.S. Sugar's board of directors to authorize moving ahead with the plan, even if it meant the end of the company.
Until the six-year period ends, Mr. Coker added, U.S. Sugar will continue to grow and produce sugar and will provide an incentive plan to retain employees. It currently has 1,700 employees. "It will be business as usual...but then we'll hand over the keys," he said.
Booting US Sugar from the Everglades also discusses the transaction.