A&B selling
stake in C&H Sugar

The unit began refining
and marketing Hawaii sugar
in 1906

By Rob Perez
Star-Bulletin

Alexander & Baldwin Inc. today said it is selling a majority stake in its historic California and Hawaiian Sugar Co. to an investment group led by New York-based Citicorp Venture Capital Ltd.

In the deal, A&B will receive a combination of cash, preferred stock and common stock in a new, recapitalized C&H and sell a majority of its equity in the new entity to the investor group.

Honolulu-based A&B expects to net about $80 million -- $55 million in cash after retiring some C&H debt and $25 million in senior preferred stock -- while retaining 40 percent common stock interest in the recapitalized company.

"This brings in an exciting new partner," said John Kelley, A&B's vice president of investor relations.

Kelley said the CVC-led group is expected to build on C&H's strong consumer brand name and move into other sugar-related grocery products.

"It's a platform for expansion," he said.

CVC officials could not be reached for comment this morning.

A&B said the transaction is not expected to have a material effect on A&B's income.

The deal is expected to close within 90 days.

C&H has been a wholly owned subsidiary of A&B since 1993.

Previously, it was owned by local sugar growers and had been the refining and marketing arm of Hawaii's sugar industry since 1906, making Hawaii sugar and the C&H brand a much-recognized name on the mainland.

Under A&B's ownership, C&H strengthened its financial position.

But A&B for several years has been looking for partners because the refinery and marketing operation didn't quite fit with A&B's core business of shipping and land development in Hawaii.

C&H operates a refinery in Crockett, Calif.

A&B's two major subsidiaries are Matson Navigation Co. and A&B-Hawaii Inc.