‘Chocfinger’ sells Amajero trading arm for price of a Mars bar; Ward’s Armajaro unit turns sour amid high costs
December 15, 2013 Leave a comment
December 13, 2013 9:04 pm
‘Chocfinger’ sells trading arm for price of a Mars bar
By Emiko Terazono in London
Anthony Ward, the cocoa trader known as “Chocfinger” for a string of audacious deals in commodities markets, has been forced to sell his London-based cocoa, coffee and sugar trading business for just $1 – about the price of a Mars Bar. Mr Ward, who in 2010 shot to prominence for buying a large amount of cocoa stocks in a strategy that sent prices to a 33-year high, will receive less than 50 cents for his stake in Armajaro Trading, the company he helped create.“It is a sad situation. After years of building the business, the owners will only get a few cents,” said one person with the knowledge of the situation.
Ecom Agroindustrial, a family-owned commodities trader based in Switzerland, announced the purchase of Armajaro Trading last month, but did not disclose the price.
While cocoa is among the best performing commodities this year, prices moved against Armajaro, leading to losses that were exacerbated by its high overhead costs.
The trading company was majority owned by Mr Ward and Richard Gower, his friend and co-founder. An employee fund held a small stake while the International Finance Corporation, the World Bank’s investment arm, owned 6 per cent.
The deal with Ecom is now awaiting final approval from the European Commission. But, in the mean time, the Swiss-based trader is understood to have provided the company with working capital.
Mr Ward started in the commodities business when he left Marlborough College in the late 1970s and has more than three decades of experience in the sector. The 53-year-old earned his moniker three years ago when his hedge fund bought a large chunk of the world’s inventories of cocoa beans.
Armajaro Trading was valued at about $200m-$300m last year, when the IFC took a stake, but it reported a net loss of $10.3m in the year to September 2012.
Armajaro put the unit up for sale a few months ago, but talks with several suitors fell through. The sale to Ecom is understood to have been brokered by the IFC and backed by Armajaro’s financing banks.
The sale of the business – which was founded in 1998 – means the umbrella group Armajaro Holding now consists of the hedge fund business and South African wine estate Vondeling. Mr Ward continues to run his hedge fund CC+.
The purchase of Armajaro will boost the position of Ecom. The group, which was founded in Barcelona in 1849, counts Starbucks and Procter & Gamble as clients.
As food companies have grown larger, the cocoa trading sector has also felt the pressure to consolidate. Barry Callebaut, the Swiss group, bought Petra of Singapore this year, and US agricultural trader Cargill has been in talks to buy the cocoa operations of rival Archer Daniels Midland.
Armajaro and Ecom declined to comment.
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