SOUTH AFRICA – South African investment company Brait, whose largest shareholder is Christo Wiese, has sold its 63.1% interest in retail chain, Iceland Foods to a newly established company NewCo in line with its revised strategy to maximise value realisation from its assets over the next five years.
NewCo is wholly owned by Sir Malcolm Walker CBE, Iceland Foods founder and executive chairman, and Tarsem Dhaliwal, its CEO. Iceland Foods will now be 100% owned by Sir Malcolm Walker CBE, Tarsem Dhaliwal and their related parties.
NewCo will pay Brait £115m (US$130.4m) for its stake, valuing the Iceland Foods stake at a premium to Brait’s carrying book value for the asset of £62.5m (US$70.88m) as at March 31, 2020. Payment for Brait’s stake will be made in three cash instalments.
The first tranche was paid to Brait on June 8, 2020 and the remaining instalments will be paid on July 30, 2021 and July 29, 2022.
Brait intends to use the proceeds to partially repay its revolving credit facility held by its subsidiary Brait Mauritius.
“This and our recent DGB transaction demonstrate Brait’s commitment to executing on its recently adopted strategy to monetize its portfolio. These two transactions will provide over R3 billion (US$0.18bn) of additional liquidity which will be used to repay existing Brait debt and potentially provide growth capital for its two cornerstone assets, Virgin Active and Premier,” Peter Hayward-Butt, partner at Ethos Private Equity (the investment advisor to Brait), said.
Iceland Foods’ management have had an interest in owning 100% of the business for some time, and diligent cash management, combined with a reduced capital expenditure programme, has provided sufficient liquidity to enable them to do so.
“On behalf of the Brait Board I would like to extend our appreciation to the Iceland management team for working with us over the last eight years to evolve this business. We congratulate them on 50 years of trading this year and wish them all the best for the next exciting chapter in Iceland Foods’ history,” Jabu Moleketi, Chairman of the Brait Board, said.
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