CSR Limited notes the announcement from the Treasurer, Hon. Wayne Swan MP, that he has today approved the application from Wilmar International Limited (Wilmar) to the Foreign Investment Review Board (FIRB) in relation to its proposed acquisition of Sucrogen, for an enterprise value of A$1.75 billion.

The transaction remains subject to approval from the Overseas Investment Office (OIO) in New Zealand and other minor customary conditions. The sale agreement provides for completion within 5 business days of satisfaction of these conditions, which CSR expects to occur prior to the end of November.

During the course of its consideration of Wilmar's application, FIRB requested CSR to provide certain assurances with regard to its ability to meet its asbestos related obligations in the future, should CSR seek to repatriate all, or part of, the sale proceeds to its shareholders.

CSR has consistently stated that it accepts its responsibilities with respect to its asbestos liabilities and that it would maintain a responsible capital structure to support its future obligations, as it has done for over 20 years.

As further evidence of this commitment, CSR has agreed to put in place arrangements for the external oversight by an independent body of any repatriation of capital by CSR (other than ordinary dividends) to its shareholders.

CSR must demonstrate to the independent body that it has fulfilled certain requirements prior to any repatriation of capital. Central to the requirements are the following:

• CSR’s asbestos liabilities will have been reviewed by an additional independent expert;

• CSR intends to retain its “investment grade” credit rating following any repatriation;

• A “big four” accounting firm will have expressed an opinion that the Board’s decision that the repatriation of capital would not materially prejudice creditors (including current and potential future asbestos claimants), was formed on a reasonable basis.

These requirements will be legally binding on CSR and any successor entities and would apply to any return of proceeds of sale of Sucrogen to Wilmar.