Court rules CSR may sell sugar division to China

SYDNEY: CSR, Australia's second-largest building products maker, won court approval to spin-off its sugar unit as it considers a A$1.75 billion offer from China's Bright Food Group.

The appeal judges considered that an "error" was made in an initial ruling that blocked the spin-off, according to a decision handed down yesterday by Sydney's Full Federal Court.

The lower court ruled on February 3 that the spin-off and proposed capital reduction would leave the company with less capital to meet asbestos-related liabilities. CSR's mills produce 45 per cent of Australia's raw sugar and account for about 4 per cent of the international trade.

Outside the court CSR spokesman Martin Cole said: "We had appealed on the basis that the first judgment contained errors in law and we welcome the clarification in today's judgment."

CSR said on April 1 it would enter talks with Shanghai-based Bright Food on the offer, which was conditional on regulatory approvals and closer examination of the sugar division.

The company's asbestos liabilities are from personal injury claims related to mining in Australia, and the manufacture and sale of products containing the material. A provision of A$446.8 million ($628 million) had been made as of September 30 for claims in Australia and the US, according to CSR's half-year report.

- Bloomberg