June 26, 2019 / 5:40 PM / 5 months ago

UPDATE 1-Sugar firm Tereos says members back strategy, but chairman loses seat

(Adds chairman not being re-elected on the board, background)

PARIS, June 26 (Reuters) - The members of French sugar cooperative Tereos backed the company’s existing strategy on Wednesday, electing a supervisory board that mostly supports management’s plans, although Chairman Francois Leroux lost his seat, the company said on Wednesday.

The company’s strategy has come under fire from some cooperative members concerned by a plunge in profit.

Like several European peers, Tereos, one of the world’s largest sugar makers, has been hit by a slump in sugar prices to historic lows after a supply surge, partly driven by the scrapping of European Union output quotas in 2017.

Results over the past two years, combined with high debts, prompted an internal crisis that divided the cooperative between management supporters and opponents.

At a general assembly in northern France on Wednesday, the cooperative’s 181 regional delegates partly renewed the supervisory board.

Tereos said results of the vote showed clear backing of the company’s current strategy.

“The regional delegates elected their supervisory board, the majority of whose members, 17 out of 24, support the strategy decided by the previous board and implemented by management,” it said in a statement.

Opponents last week proposed an alternative strategy likely to involve assets sales and management change.

Leroux, who had strongly defended the company strategy in meetings with cooperative members and said earlier this month he was confident about the outcome of the vote, failed to win a majority of votes to stay on the board, a spokesman for the company said.

Neither did some of the main dissidents.

One of them denied the company’s large victory claims.

“It is no landslide victory,” Etienne Clabaut said, adding the balance between supporters and opponents was likely much closer than the numbers put forward by Tereos.

A new chairman will be elected subsequently.

Tereos, which gathers 12,000 French sugar beet growers, reported a tenfold increase in net losses for 2018/2019 to 242 million euros ($275 million) earlier this month.

Sales fell 7% to 4.4 billion euros, while net debt rose 6% to 2.5 billion euros ($2.9 billion).

$1 = 0.8785 euros Reporting by Sybille de La Hamaide, Editing by Gus Trompiz and Mark Potter

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