The reshaping of Tiger Brands‘ business is set to continue, with another of the South African group’s units being prepared for the block.
Tiger has hired advisers at South Africa-based financial services group Absa to handle the sale of the company’s deciduous fruit business.
“Engagements with a list of potential buyers, as part of an initial expression of interest process, have commenced,” Tiger said. “The company will issue further communication as and when appropriate.”
Revenues from the unit declined by 2% to ZAR1.28bn (US$76.2m) in Tiger’s last financial year, which ran to the end of September 2019, due to lower volumes. A drought in the previous year hit opening stocks and Tiger saw a postponement of certain export shipments into the first quarter of its current fiscal year.
The business recorded an operating loss of ZAR8m, down from an operating loss of ZAR128m during the previous 12 months, due to favourable foreign-exchange positions, as well as the benefits of restructuring measures Tiger carried out at the beginning of the year.
Nevertheless, Tiger, which is looking to shake up its portfolio, indicated in May it was lining up the business for sale.
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Last week, the company announced deals had been struck to sell its processed meats business to two different companies for a combined price of ZAR428m.
Tiger has forecast the company’s underlying earnings could fall by as much as a third in its current financial year.