20. NONCONTROLLING INTERESTS
INDURA S.A.
Redeemable Noncontrolling Interest
The largest minority shareholder in Indura S.A. has the right to exercise a put option to require us to purchase up to a 30.5% equity interest during the two-year period beginning on 1 July 2015, at a redemption value equal to fair market value (subject to a minimum price based upon the acquisition date value escalated by an inflation factor). We determined that the put option is embedded within the minority interest shares that are subject to the put option. The redemption feature requires classification of the minority shareholder's interest in the consolidated balance sheet outside of equity under the caption “Redeemable Noncontrolling Interest.”
The redeemable noncontrolling interest of Indura S.A. was recorded on the acquisition date based on the estimated fair value of the shares including the embedded put option. As Indura S.A. shares are not publicly traded, the fair value of the shares was estimated based on trading multiples for similar companies in the Chilean stock market and recent transactions. The fair value of the put option was estimated using standard equity option pricing techniques, expected dividend payouts, and assumptions that market participants would use regarding equity volatility and the risk-free rate of return. Subsequent adjustments to the value of the redeemable noncontrolling interest due to the redemption feature, if any, will be recognized as they occur and recorded within capital in excess of par value.
| The following is a rollforward of the redeemable noncontrolling interest: | ||||
| Balance at 30 September 2011 | $ | - | ||
| Indura acquisition | 374.1 | |||
| Net loss | (2.4) | |||
| Currency translation adjustment | 20.8 | |||
| Balance at 30 September 2012 | $ | 392.5 | ||
| Net income | 8.1 | |||
| Dividends | (1.1) | |||
| Currency translation adjustment | (23.7) | |||
| Balance at 30 September 2013 | $ | 375.8 | ||
As redeemable noncontrolling interest is not part of total equity, the impacts above are excluded from our consolidated statements of equity.