This afternoon, the Gloria Group informed the Superintendency of the Securities Market (SMV) that it has signed a surety bond contract involving Gloria Foods and Leche Gloria, both serving as joint guarantors, along with Banco de Chile, which will act as the guarantee agent.
The purpose of this contract, as clarified by the company is to “guarantee the payment obligations amounting to CLP 110,000,000,000.00 (US$ 137.5 million), resulting from the syndicated loan agreement made between Banco de Chile and Banco de Crédito e Inversiones Gloria Chile SpA, a Chilean company that is part of our economic group.”
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As previously noted, the Gloria Group secured a syndicated loan from several international banks to finance the acquisition of Soprole. The loan was granted by Citibank, JPMorgan Chase Bank, Banco de Chile, and Itaú Corbanca to Gloria Chile Investments, a Chilean subsidiary of Gloria Foods, for the purpose of acquiring 99.887% of the issued and outstanding shares of Soprole.
These shares were owned by Zealand Milk (LATAM) Ltd., Dairy Enterprises (Chile) Limitada, and Inversiones Dairy Enterprises SA, subsidiaries of Fonterra Investments Pty Ltd. and Fonterra (International) Limited in Latin America. The loan was supported by a joint and several guarantees under Peruvian law provided by Gloria Foods – Jorba SA and Leche Gloria SA.
The joint bond announced today provides additional security for creditors, ensuring that the debt will be settled in the event of default by the principal debtor. The syndicated loan, signed between Banco de Chile and Banco de Crédito e Inversiones Gloria Chile SpA, has a maturity of five years and aims to refinance financial obligations resulting from the purchase of Soprole.
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Acquisition of Soprole
In November 2022, the Gloria Group finalized a deal to acquire Soprole in Chile for the sum of US$ 640.27 million. This transaction included the acquisition of 100% of the company valued at US$ 210 million, as reported by Grupo Gloria in the stock market, in addition to the debts that contributed to the total of US$ 640.27 million.
To complete the purchase, several conditions precedent outlined in the contract had to be fulfilled. One of these conditions included obtaining authorization from the National Economic Prosecutor’s Office (FNE) of Chile, which is equivalent to Indecopi. This authorization was granted in February 2023. Meanwhile, the launch of a Public Offer to Purchase the Shares of Soprole Investments, another condition, was finalized in March 2023.
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The acquisition involved an estimated price of US$210 million and the settlement of debts with Fonterra associated with the companies involved in the closing of the transaction.
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Gloria Group Secures Surety Bond for SOPROLE Acquisition
In a letter sent this afternoon to the Superintendency of the Securities Market (SMV), the Gloria Group reported that it signed a surety bond contract between Gloria Foods and Leche Gloria, both acting as joint guarantors, and Banco de Chile, which acts as guarantee agent.
Details of the Surety Bond Contract
The objective of this contract, clarified the company, is to guarantee the payment obligations for an amount of CLP 110,000,000,000.00 (US$ 137.5 million), derived from the syndicated loan agreement entered into between Banco de Chile and Banco de Crédito e Inversiones Gloria Chile SpA, a company domiciled in Chile that is part of our economic group.
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Context of the Syndicated Loan
As you may recall, the Gloria Group received a syndicated loan from several international banks to finance the purchase of Soprole. The loan was provided by Citibank, JPMorgan Chase Bank, Chile bank, and Itaú Corbanca in favor of Gloria Chile Investments, the Chilean subsidiary of Gloria Foods, with the purpose of acquiring 99.887% of the issued and outstanding shares of Soprole.
These shares were previously held by Zealand Milk (LATAM) Ltd., Dairy Enterprises (Chile) Limitada, and Inversiones Dairy Enterprises SA, subsidiaries of Fonterra Investments Pty Ltd. and Fonterra (International) Limited. The loan was backed by a joint and several guarantees under Peruvian law provided by Gloria Foods – Jorba SA and Leche Gloria SA.
The joint bond announced today provides additional security for creditors by ensuring that the debt will be covered in the event of default by the principal debtor. The syndicated loan signed between Banco de Chile and Banco de Crédito e Inversiones Gloria Chile SpA has a maturity of five years, aimed at refinancing financial obligations arising from the acquisition of Soprole.
READ ALSOGloria expands portfolio with launch of new line of milk, yogurts, and cheeses
Details of SOPROLE Acquisition
In November 2022, the Gloria Group finalized the acquisition of Soprole of Chile for US$ 640.27 million. The operation involved acquiring 100% of the company, valued at US$ 210 million, as reported on the stock market, alongside the debt accrued to totals up to US$ 640.27 million.
Conditions Precedent for Acquisition
To complete the purchase, several conditions precedent outlined in the contract had to be satisfied. Among these was the acquisition of authorization from the National Economic Prosecutor’s Office (FNE) of Chile, which serves a function similar to that of Indecopi. This crucial authorization was successfully obtained in February 2023, followed by the completion of a Public Offer to Purchase the Shares of Soprole Investments in March 2023.
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Financial Overview of the Acquisition
The acquisition included an estimated price of US$210 million and the cancellation of existing debts associated with Fonterra from the companies involved in the closing transaction.
Benefits of the Surety Bond
- Increased Creditor Confidence: The surety bond enhances creditor security by ensuring that financial obligations will be met, even in the event of potential default.
- Access to Lucrative Opportunities: With the backing of this bond, Gloria Group can explore further opportunities in the market, enhancing their financial strength and operational capabilities.
- Long-Term Partnerships: The bond solidifies working relationships with financial institutions like Banco de Chile, fostering an environment of trust and reliability.
Practical Tips for Businesses Considering Surety Bonds
- Understand Your Financial Obligations: Clearly outline all financial responsibilities before entering into a surety bond to determine appropriate funding.
- Choose Reputable Companions: Collaborate with reputable bonding agents that can guide you through the bonding process efficiently.
- Maintain Open Communication: Ensure transparent communication with all parties involved in the bond contract to minimize misunderstandings.
Future Prospects for the Gloria Group
With the successful acquisition of Soprole and the signing of this surety bond, Gloria Group seems well-positioned to continue enhancing its portfolio, diversify its offerings, and expand its market presence across Latin America.
Summary of Key Financial Data
| Transaction | Amount (US$) | Date |
|---|---|---|
| SOPROLE Acquisition | 640.27M | November 2022 |
| Surety Bond | 137.5M | March 2023 |
| Guarantee Agreements | 210M | February 2022 |
