Beatrice decides to sell its units

Food company approves plan, will go out of business

Liquidation

May 28, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

TLC Beatrice International Holdings Inc., which became the nation's biggest African-American-owned company with Baltimore native Reginald F. Lewis at the helm, is going out of business.

The global food and drink company said yesterday that its board of directors has approved the sale of its Spanish ice cream operations and an overall liquidation plan.

TLC Beatrice's remaining assets -- consisting mainly of cash and an Irish snack-food business -- would be sold, with the proceeds going to the company's shareholders.

The shareholders are expected to vote on the liquidation and sale plans within two months.

The announcements mark the beginning of the end for a company that was taken over in 1987 by Lewis, a Dunbar High School alumnus who went to Harvard Law School and had a lucrative career as a Wall Street attorney and venture capitalist.

His TLC holding firm (the initials stand for The Lewis Company) had established a successful business track record when it grabbed Beatrice's international holdings in a $985 million leveraged buyout.

Lewis moved quickly to reduce the company's debt and streamline its operations. Sales increased from $1.02 billion in 1988 to $1.54 billion in 1991.

Lewis was as generous as he was shrewd, donating $3 million to Harvard Law School in 1991 and establishing a foundation that gave millions to charitable, educational and civil rights institutions around the world.

On Jan. 18, 1993, TLC Beatrice announced that Lewis had brain cancer. The next day, he died of a cerebral hemorrhage. He was 50 years old.

`Create shareholder value'

His widow, Loida Nicolas Lewis, became TLC Beatrice's chairwoman and chief executive officer. She said the liquidation of her late husband's company has its painful side. "A chapter in his life is ending, so it's hard," she said.

She said yesterday's developments are consistent with his long-term aims. "His goal was to create shareholder value and provide liquidity, and during the five years he was running the business, I heard it enough to know that was the goal I was assuming the responsibility for," she said.

She added that "market conditions indicate that now is the best time to sell all the pieces and now is the best time to do the liquidation."

Lewis said she expected the company would be dissolved by year's end.

Reginald Lewis' mother, Carolyn Fugett of Randallstown, said the demise of her son's company hadn't sunk in. "I really haven't had time to put it in full feelings," she said.

TLC Beatrice said yesterday that it has agreed to sell its 65 percent share of Grupo Kalise Menorquina SA, which sells ice cream in mainland Spain and the Canary Islands, to Iberian Beverages Group of Spain for $191 million in cash and debt. The sale is expected to close this summer.

Don Delfin Suarez, TLC Beatrice's minority partner in the Spanish ice cream business, has a right to acquire TLC Beatrice's ownership interest under the same terms offered to Iberian Beverages Group.

Prospective buyers

New York-based TLC Beatrice said it has received offers for Tayto, an Irish company that sells potato chips and other snacks. In addition to its ownership of Tayto, TLC Beatrice operates Bireley's, a small beverage company in Thailand.

Lewis said the company is talking to prospective buyers of Bireley's, though the devaluation of the Thai baht is making such a sale more difficult.

The deals will be the latest in a string of TLC Beatrice sell-offs. In 1997, the company sold its food-distribution business in France for $576 million. Last summer, it sold its European beverage operations for $44 million.

TLC Beatrice has about $200 million in cash from prior asset sales. The Lewis family owns 51 percent of the company.

Last year, TLC Beatrice had net income of $23 million on sales of $322.2 million. Income and sales were down from 1997, when the company had $160.2 million in net income on sales of $344.4 million.

Pub Date: 5/28/99

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