Coca-Cola Amatil has written down the value of its up-for-sale food unit SPC Ardmona to zero in its latest full-year accounts as the Australia-based business continues the process to tie down a buyer.
A final decision was taken last November to put SPC on the market following an extensive review of “growth options” for the fruit and vegetable business on the back of a AUD100m (US$71.3m at today’s rate) co-investment with the Victorian government.
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Alison Watkins, Coca-Cola Amatil’s managing director, said in November a sale of SPC, which it bought in 2005, would give the company the ability to “sharpen its focus as a beverages powerhouse”.
Bidders for SPC are being short-listed, New South Wales-based Coca-Cola Amatil announced this week in conjunction with its annual results.
“The divestment process has proceeded to the first round of non-binding indicative offers, of which a number have been received from Australian and overseas parties,” according to the earnings release from the Sydney-listed firm.
Despite the sale process gaining some momentum, Coca-Cola Amatil remains cautious on the prospects for completing a sale of loss-making SPC. Last year, what appeared to be a done deal to offload SPC’s IXL jam and Taylor’s sauces business to Kyabram Conserves fell through.
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By GlobalData“Given the wide range of offers received, in terms of size and structure, and the inherent uncertainty of the financial outcome of the sale process, we believe it is prudent to recognise a non-cash impairment of the carrying value of SPC’s net assets held for sale of AUD146.9m before tax in the 2018 full-year accounts,” Coca-Cola Amatil explained in the results statement this week.
“This has reduced the carrying value of SPC’s net assets held for sale as at 31 December 2018 to zero.”
For Coca-Cola Amatil’s latest set of annual results, SPC was classified as discontinued operation. The divestment target booked a AUD10.4m loss for the year in terms of EBIT.
