Archer Daniels Midland to cut stake in Wilmar, sell shares for $500 million

FILE PHOTO: The Archer Daniels Midland Co. (ADM) logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2018. REUTERS/Brendan McDermid/File Photo

(Reuters) - Grain trader Archer Daniels Midland Co (ADM) said on Wednesday it plans to sell shares and bonds in Singapore-based Wilmar International with a combined value of $800 million.

ADM, which is one of Wilmar’s largest shareholders, added that it expects to retain at least a 20% stake in the agribusiness firm.

The company had a 24.6% effective stake in Wilmar as of March 4, according to Refinitiv.

Two of ADM’s units will undertake the proposed sale of Wilmar’s ordinary shares for about $500 million pursuant to a secondary block trade agreement with a syndicate of managers, the Chicago-based company said.

ADM added that unit ADM Ag Holding also aims to conduct an offering of about $300 million worth of bonds outside the United States.

ADM expects to use the net proceeds from the block trade for meeting its working capital requirements, funding its capital expenditures and a possible buyback.

Wilmar did not immediately respond to a request for comment.

Reporting by Shruti Sonal in Bengaluru; Editing by Kirsten Donovan