Chelsea Sugar owner CSR's court application to put its sugar business de-merger plans to a shareholder vote has been dismissed.
Justice Margaret Stone turned it down in the Federal Court in Sydney this week, saying the de-merger would hamper CSR's ability to meet asbestos liabilities arising from its building products
division.
"As a result of the demerger CSR is less likely to meet its asbestos liabilities," Justice Stone said.
CSR plans to demerge its sugar business, creating a separately listed company called Sucrogen with its own board and management, leaving CSR to continue solely as a producer of building products.
The company's existing and future asbestos liabilities would be carried solely by CSR rather than jointly by CSR and Sucrogen.
CSR said recently the process was progressing and it hopes to have the de-merger completed by the end of March.
On Wednesday CSR shares went into a trading halt ahead of the ruling.
"A trading halt is necessary to permit an orderly market in CSR shares while the judge hands down the court's decision and CSR considers that decision," CSR said in a statement
The Australian Securities and Investments Commission has raised concerns about the amount of information provided by CSR on the ramification of the de-merger on the company's asbestos liabilities.
CSR recently dismissed approaches from China's Bright Foods which expressed interest in buying CSR's sugar assets in a trade sale.
CSR indicated it believed it could secure a better price by demerging the business.
- AGENCIES
