08 Nov 19 Tiger Brands looking to sell off its processed meat business
Still feeling the fallout of 2018’s deadly listeriosis outbreak, the food giant has announced today that the business was not an ideal fit in its portfolio.
Tiger Brands reports it has already received a number of offers for the value-added meat products (Vamp) division, which includes the brands Enterprise, Renown, Bokkie and Mieliekip.
Tiger Brands said in a stock market statement that the board had started formal due diligence on 6 November after receiving “several indicative offers”. It will further evaluate its options once this is completed.
The listeriosis outbreak in 2018 that left over 200 people dead forced the company to recall tons of produce and close four meat processing facilities. Its share price had also plunged 40% in 2018, falling a further 11.7% in 2019.
The VAMP unit’s revenues slid 79% in the six months to end March, prompting an operating loss of R296-million ($20.05 million) as it struggled to get back up and running following the suspension of its operations. It reopened in December 2018.
The company is also facing a class-action lawsuit as a result of the outbreak, but has denied liability, but has affirmed that the prospective sale of the unit does not affect its commitment to this process.
Tiger Brands added that the Vamp business had previously been earmarked for evaluation, but the temporary closure of facilities due to the outbreak had delayed this.
Source: BusinessLive.co.za; EWN.co.za