Louis-Dreyfus Commodities Readies for Possible IPO or Stake Sale

Apr 01, 2014 5:46 pm ET

April 2 (Bloomberg) -- Louis Dreyfus Commodities BV, one of the world’s largest agricultural commodity traders, plans to reorganize to prepare itself for a possible stake sale or initial public offering.

While the sale of an equity interest to a strategic partner or a share listing won’t happen in the immediate future, the company wants to be ready, Margarita Louis-Dreyfus, chairman of Louis Dreyfus Holding BV, said yesterday in a brief interview at the FT Commodities Global Summit in Lausanne.

Louis Dreyfus joins other commodity trading firms including Gunvor Group Ltd. and Mercuria Energy Group Ltd. in considering a possible stake sale.

Louis-Dreyfus said the largest raw-cotton trader could sell a stake to a strategic partner such as a sovereign wealth fund. The food and agriculture company, whose major trading operations are in Geneva, also has plenty of potential partners, she said.

“We know everyone,” said Louis-Dreyfus, who controls the company through a family trust.

The plans for a possible equity sale or IPO were first reported by the Financial Times.

Louis Dreyfus has raised funds through bonds listed on the Singapore and Luxembourg exchanges. It said on March 26 that profit fell 34 percent in 2013 as lower commodity prices and reduced volatility hurt trading operations. Price swings for Louis Dreyfus’s products, which include rice, oilseeds, wheat and green coffee, shrank by 20 percent from 2012, when a drought in the U.S. sent prices soaring.

Growth Plans

Capital spending totaled $689 million in 2013, according to its annual report. The company said it plans to double its holdings by spending $4 billion on “mid-sized” assets by 2018.

Louis Dreyfus Commodities said in October it had formed a joint venture with Brooklyn Kiev LLC to develop and manage a multi-commodity terminal at the Black Sea port of Odessa. Four months later it announced the purchase of Ilomar Holding NV, an owner of exchange licensed cocoa and coffee warehouses.

The company is present in more than 90 countries, with Europe and the Black Sea region remaining the largest trading hub. Margarita Louis-Dreyfus said in 2013 the company planned to more than double its grain-storage capacity in Russia in four years.