Tiger Brands has sold its share in its loss-making Nigeria business, Tiger Branded Consumer Goods of Nigeria, to partner Dangote Industries.
The South African company had indicated in November it would no onger “financially support” TBCG and was looking at options for the business, in which it holds a 65.7% share. In a statement to the Johannesburg stock exchange, Tiger said the deal would ensure TBCG would remain a “viable going concern” that could retain its employees and meet obligations to stakeholders.
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Tiger said: “The transaction envisages that sufficient capital will be injected into TBCG in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders.”
Dangote will provide a cash injection of ZAR700m (US$46.6m) to TBCG and in return Tiger will sell its 65.7% stake for the nominal consideration of $1 and write off shareholder loans to the venture.
The TBCG investment was fully written down on 30 September this year and therefore a loss will not be incurred on disposal. “Given the losses that have been sustained by TBCG since its acquisition by Tiger Brands, the Transaction will have a positive impact on Tiger Brands´ earnings in the future,” Tiger said.
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