ChemChina’s Syngenta unit aims to sell around $5bn in bonds within weeks after it clinches a settlement with US farmers who had sued over genetically engineered corn, Chief Financial Officer Mark Patrick told Reuters.
Patrick also said in an interview yesterday the Swiss crop protection and seeds company was interested in assets coming up for sale via anti-trust disposals amid industry consolidation.
But he said regulators “have been quite restrictive in terms of who can acquire what”.
Syngenta in late 2017 scrapped a $7bn bond – intended to help finance ChemChina’s $43.5bn acquisition of the Basel-based company that was completed last May – as the lawsuits by farmers soured potential investors.
The case stemmed from Syngenta’s decision to commercialise a genetically modified strain of corn before China approved importing it.
Though Syngenta agreed to settle the case in September for around $1.5bn, according to a person familiar with the deal, S&P put Syngenta’s BBB- on ratings watch amid uncertainty over the details of the agreement. Fitch followed suit. Patrick said plaintiffs’ lawyers are negotiating final terms, with a judge likely to sign off “in coming days”.In the meantime, he said, Syngenta has been meeting ratings agencies to allay concerns over its balance sheet and debt structure.
“I would envisage that we would be in a position to come back to the bond market in the coming weeks, hopefully before the end of Q1, maybe not with a $7bn bond, probably more likely in the $5bn range,” Patrick said. “Obviously a key component of that is finalisation of the (legal) settlement and confirmation from S&P and Fitch of the investment-grade rating,” he added.
Syngenta reported 2017 sales slipped 1% to $12.65bn, hurt in particular by weakness of crop protection products in Latin America.”2017 was a tough year,” Patrick said.
Syngenta has been making acquisitions, including the Nidera crop seeds business of Chinese grains trader COFCO International. It may be a suitor for Bayer’s global vegetable seeds business that the German company is unloading to win approval of its own $63.5bn purchase of US-based Monsanto. “I think certainly the industry consolidation is providing a number of opportunities that are of strategic value to us and clearly we would be very interested in acquiring some of those,” Patrick said.