SOUTH AFRICA – South African food manufacturing giant, has announced the completion of sale of its value-added meat product (VAMP) business units to Silver Blade, a subsidiary of Country Bird Holdings.
In August the group announced that it had entered into an agreement with Silver Blade, to acquire the meat processing businesses at Germiston, Polokwane and Pretoria for R153 million (US$8.7m), together with all the inventories located at the units for R158 million (US$9m).
With the total transaction amounting to R311 million, R40 million (US$2.3m) will be paid on November 1, and the balance on April 1, 2021.
According to Tiger Brands, the disposal of the Vamp business portfolio, which was closed temporarily in 2018 after the world’s biggest listeriosis outbreak, is part of a strategic review initiated in 2017 before that outbreak after it concluded that the business was “not an ideal fit” within the group’s portfolio.
“One of the major outcomes we would have achieved by selling the businesses as going concerns is that the jobs of almost 1,000 employees will be safeguarded.”Tiger Brands Chief Executive – Noel Doyle
Its value-added meat product brands include Enterprise, Mielieklip, Renown Bokkie and Top One.
The company is facing a class action lawsuit over its role in the listeriosis outbreak, which killed more than 200 people in South Africa and was traced back to a factory run by Tiger Brands-owned Enterprise Foods.
Tiger Brands said that any potential liability under the class action will not transfer to the new owners.
As part of the agreements, the company indemnifies the purchasers against any potential liability that may arise on conclusion of the legal process, Tiger Brands said.
Other than the sale of the Vamp business, the food company also entered into a deal to sell its abattoir business at Olifantsfontein to Molare Proprietary Limited, one of South Africa’s largest pork processors.
The deal included R100 million (US$5.7m) for the unit and a further R17m (US$0.97m) for inventories at the business.
“One of the major outcomes we would have achieved by selling the businesses as going concerns is that the jobs of almost 1,000 employees will be safeguarded,” said Tiger Brands Chief Executive Noel Doyle.
The JSE listed company recently announced that Khotso Mokhele would step down as chairman of the board on December 31
Mokhele will be replaced by Geraldine Fraser-Moleketi, a lead independent director at mining firm Exxaro, who will take over on Jan. 1 after a handover period starting from September.
The packaged food processor expects its headline earnings per share (HEPS) from total operations for the year ending September 30 to fall between 35% and 40% from the 1,322 cents (US$0.7693) reported a year earlier.
Excluding its deli foods business in Nigeria and processed meat business, which are both discontinued, HEPS, the main profit measure in South Africa that strips out certain one-off items, is expected to fall by up to 33%.
The firm blamed a poor first half performance, Covid-19 related costs of R255 million (US$14.85 million) and restructuring costs estimated at about R70 million (US$4.1 million).
The owner of Jungle Oats additionally stated it would lose R302 million (US$17.8m) in the duration from deferring meals rate will increase as phase of government guidelines to guard consumers during the lockdown.
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