Colonial Sugar reporting financial trouble in brew

Published 12:00 am Wednesday, January 10, 2001

Daniel Tyler Gooden

GRAMERCY – Imperial Sugar, which is the parent company of Colonial Sugar in Gramercy, reported a loss in their fourth quarter earnings report. Due to financial trouble, it was not able to pay $12.2 million in interest on $250 million notes due on Dec 15, 2000. The company and it’s officers entered into a waiver agreement, which would allow their creditors to continue providing capital for Imperial, even though they had not paid off the interest.

“We and our financial advisors have been working over the past several months with Harris Trust and Savings Bank, the agent bank for our Senior Credit Agreement lenders, as well as a steering committee of lenders under that agreement, and with an ad hoc committee of our noteholders to develop a plan that will enable use to deliver our balance sheet through a conversion for the company’s notes into common equity and greatly enhance the financial strength of Imperial Sugar, while enabling it to remain an independent company under existing management,” stated James Kempner, president and CEO.

Kempner continued that he was confident that an agreement could be reached between all parties and Imperial could complete a financial restructuring within their fiscal year. Whether or not Imperial files for bankruptcy, Kempner stated that all suppliers and trade creditors would “be paid in full and on time.”

Imperial reported a net loss of $37.1 million for the last quarter, which had dropped $8.6 million from 1998. Net sugar sales have decreased continually in the last few years for Imperial Sugar Company. The loss is attributed to the decrease in sale prices for refined sugar, as well as higher energy costs. Imperial has discontinued processing sugar beets in two Northern California facilities, and one in Florida.

Colonial Sugars has not been able to state how Imperial’s financial concerns will affect them. Officials at Imperial Sugar Company were not available for comment by L’Observateur’s deadline on Tuesday.