SOUTH AFRICA – RCL Foods, one of South Africa’s prominent food producers, is moving forward with its plan to spin off its Rainbow Chicken division into an independent, publicly traded company.
This strategic decision has been under consideration since 2021, when Paul Cruickshank, a seasoned executive within the company, took on the role of CEO and steered the firm towards a renewed focus on the grocery, pet food, and baked goods sectors.
Having already divested its Vector logistics unit last August, RCL Foods reversed an earlier decision to exit the sugar business in 2022.
Now, Rainbow Chicken is on track to debut on the Johannesburg Stock Exchange, with a listing date set for June 26.
The detailed prospectus outlining the specifics of this spin-off will be released on June 10.
Current shareholders of RCL Foods will be allotted one Rainbow share for each RCL share they possess, distributing over 890 million shares in the process.
“Rainbow has made remarkable progress in achieving its goal of restoring profitability through a robust and sustainable operational foundation,” RCL Foods stated.
In its interim financial results for the first half, ending in December, RCL Foods reported that despite the challenges posed by Avian influenza, Rainbow Chicken showed improved performance.
This was attributed to the ongoing execution of a turnaround strategy that enhanced agricultural productivity and operational efficiencies, leading to increased volumes and margins.
The first-half results revealed an 8.4% growth in revenue from continuing operations, reaching R20.1 billion (US$1.07B).
The company’s EBITDA (earnings before interest, taxes, depreciation and amortization) surged by 48.6%, with an adjusted increase of 32.4%.
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