PARIS (Reuters) – Margarita Louis-Dreyfus borrowed $1 billion from Credit Suisse (S:) last year to buy out minority shareholders of Louis Dreyfus Company (LDC) and pledged her majority stake in the commodities trader as collateral, a company filing showed.
The loan was used to buy a 16.6% stake in the company from other family members and the share pledge means, if Margarita Louis-Dreyfus can’t repay or refinance the loan, Credit Suisse could take control of the 169-year old business.
Margarita Louis-Dreyfus, who assumed control of the 169-year-old trading house in 2009 on the death of her husband Robert, sought the loan as the trading firm was trying to settle the costly buyout of minorities and revive flagging profits.
She announced last January that she had completed the purchase of 16.6% of LDC’s holding company from other family members, bringing her stake to around 96%.
LDC had previously indicated that its majority owner had obtained a bank loan to finance the buyout, without providing more details.
An annual filing by Akira B.V., which represents the family trust headed by Margarita Louis-Dreyfus, said it had borrowed $1.03 billion from Credit Suisse (Switzerland) Ltd on or about Jan. 25, 2019.
“In anticipation of the borrowing of the foregoing funds, the Company pledged all of its shares of LDHBV to Credit Suisse (Switzerland) Ltd,” Akira said in the company filing, which was made in the Netherlands on Dec. 31.
LDHBV, short for Louis Dreyfus Holding B.V., is the structure that holds the family’s shares in LDC.
The amount borrowed by Akira followed an agreement on Nov. 2, 2018, under which Credit Suisse (Switzerland) Ltd would provide a maximum $1.075 billion in relation to Akira’s buyout of other LDC shareholders, the filing showed.
The document did not indicate when the loan should be repaid.
LDC and Credit Suisse did not immediately respond to requests for further details.
The share pledge by Akira was reported previously by Bloomberg.
In November LDC, also known as Dreyfus, launched a cost-cutting plan after a decline in first-half profits which it blamed on international trade tensions and a swine disease epidemic in Asia.
The company also said last year that it may look at selling a stake to a regional player, adding to speculation about industry consolidation.
Dividends have offered some leverage for Margarita Louis-Dreyfus and LDC disclosed in its interim results that it had paid its biggest dividend in five years in 2019.
Akira’s filing showed that the vehicle had received a dividend of $241.3 million from LDC’s holding structure at the end of March 2019.
The filing also revealed that the price paid by Akira for the 16.6% stake sold by minority shareholders was $824.7 million, broadly in line with previous valuations.
Margarita Louis-Dreyfus is required to purchase shares from other family members wishing to sell under a long-term arrangement established by her late husband.
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