Reports emerged Monday that the world’s largest trader in palm oil, Wilmar International Ltd sought about 1.1 billion US dollars in funding from banks in its quest to take over the Australian sugar business of CSR Ltd. According to the reports, the move was made by the company in a bid to raise the money for the acquisition it announced recently will have the bank’s loan it money to the tune of over 1 billion US dollars to enable it undertake the purchase.

Sources close to the deal revealed that the loan would be a mixed maturity term effort and will be served in Australian as well as US dollars in an all-in fee averaging 100 basis points over the London Interbank offered rate. Even so, the reports would validate the sources of the information, rather stating they were close to the private deal and had to remain anonymous.

In the deal that had been agreed on for the takeover, the Singaporean based Wilmar International had accepted to remit 1.75 billion Australian dollars for CSR’s Sucrogen Ltd business in July, successfully outdoing a bid from a Chinese firm, Bright Food Group Co. In a statement released after the announcement of the deal, Wilmar had then said that it expects the acquisition of the Australian business would enable the company create synergies and follow growth plans in Indonesia and other highly prospective Asian markets.

At the same time, Wilmar International had reiterated that it planned to make the acquisition using funds from internal sources and additional borrowing from banks. As it is, the Singaporean firm has purchased bonds and loans maturing by the end of 2012 according to reports.

Even so the company would not comment on the matter but speculation is high over the approach to banks as Wilmar International Ltd had earlier said it would be seeking further capital from lending institutions. Wilmar International Limited is Asia’s leading agribusiness group. It is amongst the largest listed companies by market capitalisation on the Singapore Stock Exchange.

The company's businesses include oil palm cultivation, oilseeds crushing, edible oils refining, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, and grains processing and merchandising. Headquartered in Singapore, Wilmar has operations in more than 20 countries across four continents, with a primary focus on Indonesia, Malaysia, China, India and Europe.

2 Aug 2010.