Rica Foods, Inc. (Amex: RCF) announced today that it has reached an Agreement with Stock Management International (the “SMI”), a British Virgin Islands corporation, to sell an 81% controlling interest in its third- and fourth-level subsidiaries, Restaurantes As, S.A. and Corasa Estudiantes, S.A. (“Restaurants”), for cash. Pursuant to the terms and conditions of the Agreement, RCF will receive US $4.05 million over a five year period, with an interest rate of 10.06% per annum, as consideration for the right to operate the 31 locations of Restaurants, a fast-food restaurant chain. However, RCF’s subsidiary Corporacion As de Oros, S.A., will continue to supply poultry products to Restaurants, for use in its chain, for several years.
“The decision to sell off the Company’s restaurant chain allows us to focus on what we do best — the production and sale of quality products to the big, quick-service restaurant chains,” Calixto Chaves, Rica’s Chairman and CEO, said today. “Our goal is to carve our niche by marketing our brands with specificity to both the local and foreign markets while concentrating on the production, sale, and delivery of poultry, further processed products and animal feed concentrate. We have been evaluating the idea of spinning off Restaurants for some time now,” Mr. Chaves commented.
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Restaurants, subsidiaries of Corporacion As de Oros, S.A., came to the Company as a “bonus” in connection with the Company’s 1998 acquisition of Corporacion As de Oros, S.A. “Even though it was attractive to operate the fast-food restaurant chain, we felt it was time to concentrate our efforts on the industry in which we have been most successful — the production and sale of quality food at affordable prices,” Mr. Chaves continued.
“Our long term goal with Restaurants has been to find a way in which the Company could both divest its interest in the restaurant chain, yet maintain the chain as a client. We are proud to announce that the customers of Restaurants will continue to enjoy our first-quality poultry products,” Mr. Chaves concluded. Certain terms and conditions of the Agreement are to be finalized upon closing, which is expected to occur in the month of November 2000.
RFC is the parent Company of the largest poultry producers in Costa Rica. The Company owns Corporacion Pipasa, S.A. and Corporacion As de Oros, S.A., which supply approximately 70% of the total Costa Rican poultry market. RCF’s subsidiaries promote and market the brand names of Pipasa, As de Oros, Aguilar y Solis, Kimby, Mimados, Nutribel, Supremo, Kanin, Ascan and Chulitas in Costa Rica and Central America. Pipasa is considered one of the most recognized leaders in Central American chicken production, reaching agreements to supply poultry products in Costa Rica to Burger King, Pizza Hut, Price Smart, Subway, KFC, Gerber Products, and to McDonald’s restaurants in Central America.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more complete information concerning factors that could affect the Company’s results, reference is made to the Company’s registration statements, reports, or other documents filed with the Securities and Exchange Commission.
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By GlobalDataFor more information, contact RCF at (305) 476-1757, or email to: mmarenco@ricafoods.com.
