South African food group Tiger Brands has pulled funding from its Nigerian arm and is mulling options for its share in the business.
In a stock exchange announcement, the company said it has “decided not to provide further financial support with respect to its investment in Tiger Branded Consumer Goods plc of Nigeria”.
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The Nigerian business features Dangote Flour Mills, in which Tiger holds a 65.7% share.
The business, which produces flour and pasta, has been struggling in recent quarters. In the last year, Tiger Brands has written down the value of DFM twice.
In May this year, DFM posted an operating loss of ZAR110m (US$7.7m). Tiger Brands said the short-term macro environment in Nigeria impacted its results and expressed its commitment to the Nigerian market.
“Although Nigeria remains highly competitive and challenging, the Nigerian market offers an attractive source of growth,” CEO Peter Matlare said at the time. “The group is pursuing a number of opportunities which could enhance the future operating income of DFM, impacting positively on the outlook for the business.”
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By GlobalDataHowever, Tiger said yesterday it is “currently exploring various alternatives with respect to its shareholding in Tiger Branded Consumer Goods plc”.
