Imperial Sugar Co., Sugar Land, Texas, will reduce the unfunded liability of its pension fund by about $13 million through the sale of its Holly Sugar Corp. subsidiary to the Southern Minnesota Beet Sugar Cooperative, according to Hal Mechler, the company's CFO.
"We expect the pension liability to go down by about $13 million," he said. "That liability is being assumed by the buyer." The company's unfunded liability was $76 million as of Sept. 30, 2004, the end of Imperial Sugar's fiscal year, according to its 2004 annual report.
On Wednesday, the company announced an agreement to sell Holly Sugar to the cooperative for $50 million.
Through the first nine months of fiscal 2005, Imperial Sugar contributed $800,000 to its $158.5 million pension plan, and company officials plan to contribute about $600,000 during the remainder of the current fiscal year, according to its most recent quarterly 10-Q filing with the SEC. The company expects to contribute $19 million in 2006, $16 million in 2007, $12 million in 2008 and $6 million in 2009.