`Spanish Olive Oil Giant Grupo SOS Announces New Financial Strategy

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Spanish Olive Oil Giant Grupo SOS Announces New Financial Strategy

Jan. 12, 2011
Charlie Higgins

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By Char­lie Hig­gins
Olive Oil Times Con­trib­u­tor | Report­ing from Buenos Aires

The Span­ish con­glom­er­ate Grupo SOS, the world’s leader in olive oil sales, will begin 2011 on solid finan­cial ground. With both the suc­cess­ful refi­nanc­ing of over a bil­lion euros in debt and a recent injec­tion of almost 600 mil­lion in cap­i­tal, the com­pany has announced a detailed strate­gic plan to dis­trib­ute div­i­dends to investors within the next two and a half years.

The good news began in Novem­ber, when Grupo SOS sold its rice busi­ness to Ebro Foods for 195 mil­lion euros. The com­pany also opened the door to share­hold­ers, with a share of 9.333% after dis­burs­ing some 47.5 euros. In Jan­u­ary Ebro’s ex-man­ag­ing direc­tor Jaime Carbó will become the new CEO of Grupo SOS in a move that solid­i­fies the rela­tion­ship between the two ali­men­tary giants.

In a recent inter­view with Span­ish busi­ness mag­a­zine Expan­sión, cur­rent Grupo SOS pres­i­dent Mar­i­ano Pérez Claver dis­cussed the company’s busi­ness strat­egy. SOS now has a clear future and strong growth poten­tial.” Claver com­mented on the impor­tance of man­age­ment in the devel­op­ment of the busi­ness, adding,“The value of SOS is in the busi­ness.”

Grupo SOS has vowed to pay div­i­dends to investors by the mid­dle of 2013 in accor­dance with recent refi­nanc­ing agree­ments. How­ever actual share­holder returns will be con­tin­gent upon the company’s level of debt. We can’t pay out div­i­dends until the com­pany reduces its level of debt by 300 per­cent. That’s our game plan and we hope to achieve our goal in the next two and a half years,” announced Pérez Claver. The last Grupo SOS div­i­dend pay­out was made on June 18, 2008 at 0.036 Euros per share.

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Fur­ther­more, Pérez Claver explained that the sale of the rice busi­ness to Ebro Foods back in Novem­ber will allow Grupo SOS to exceed ini­tial growth rate esti­mates. He attrib­utes this to the rapid growth of olive oil, the company’s biggest seller, in the inter­na­tional mar­ket, par­tic­u­larly in the United States, Brazil and China. By invest­ing more in olive oil instead of rice, Grupo SOS should be able to achieve sus­tain­able lev­els of debt.

Grupo SOS is Spain’s sec­ond largest food con­glom­er­ate and owns the brand name Car­bonell, the world’s best sell­ing olive oil. A num­ber of other lead­ing olive oil brands like Cara­pel­lia, Bertolli and Sasso also fall under SOS’s cor­po­rate umbrella.

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