Daybreak considers business rescue
State-owned chicken producer Daybreak Foods says it is considering business rescue, a day after officials from the National Council of Societies for the Prevention of Cruelty to Animals (NSPCA) said it had been forced to cull thousands of starving chicks.
According to News24, Daybreak said that significant financial constraints were affecting its operations, meaning it could not afford feed and was struggling to pay suppliers and staff salaries.
It has requested funding from the state-run asset manager, the Public Investment Corporation (PIC).
Workers at Daybreak’s facilities in Limpopo are on strike due to the non-payment of salaries. Daybreak said it could not commit to a ‘specific date for employee salary payments’ as it was awaiting a response from the PIC regarding the funding request.
Earlier this week, the NSPCA said it had been forced to cull 350 000 starving chicks at contract farms that raise them for Daybreak.
Many had resorted to cannibalism in a desperate bid to survive.
Daybreak Foods, previously known as Daybreak Farms, is a major employer in Delmas, east of Johannesburg, with over 3 000 employees. It also has operations in other provinces.
It confirmed the NSPCA’s reports about cannibalism and culling, blaming these on financial troubles.
Daybreak is one of the few active farming operations still wholly owned by the state.
The PIC controls 100% of its shares on behalf of investments made by the Government Employees’ Pension Fund, the Compensation Commission, and the Unemployment Insurance Fund.
The company has been beset by a series of scandals and governance crises since late 2020, and it has cycled through four permanent or acting CEOs in the past four years, reports News24.
The PIC said this week it was ‘deeply disturbed’ by reports of culling and cannibalism. The asset manager said it was continuing to support Daybreak and had provided ‘capital allocations to provide liquidity to the company’, without providing details.
‘The PIC is engaging its clients, the board of Daybreak and other stakeholders on an urgent basis to find a solution aimed at preserving the value of assets and, importantly, jobs in the company.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
