Daybreak placed into business rescue
The board of directors of crisis-hit state-owned chicken producer Daybreak Foods has placed the company into business rescue, reports News24.
The Public Investment Corporation called business rescue the ‘best path’ to preserve the company’s value and potential – and to help save around 3 000 jobs.
State asset manager the Public Investment Corporation (PIC), which is the agriculture group’s sole shareholder, said in a note that it believed the company can and must be rescued.
PIC called business rescue the ‘best path’ to preserve the company’s value and potential – and to help save around 3 000 jobs. The PIC said the decision to enter business rescue was taken by Daybreak’s board of directors.
Daybreak is a major employer in and around Delmas, Mpumalanga. It also has operations in other provinces.
It first floated the idea of business rescue earlier this month after it ran out of money to pay staff and buy feed for chicks. As a result, staff went on strike, leading to mass starvation of the chicks.
The PIC promised it R74m in immediate working capital to buy feed and pay salaries, but this was not enough to stave off business rescue.
A lack of food and water for the chicks triggered the intervention of the NSPCA, which said earlier in the month it was forced to cull 350 000 starving chicks – many of which had resorted to cannibalism in a desperate bid to survive.
The organisation said it would seek to have Daybreak prosecuted under anti-cruelty and animal abandonment laws.
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 the Government Employees’ Pension Fund, the Compensation Fund, and the Unemployment Insurance Fund, according to News24.
The company has been beset by scandals and governance crises over the past few years, with four permanent or acting CEOs since 2020.
The PIC said yesterday it had reconstituted the company’s board ‘to stabilise governance and operations’.
Cynthia Nkuna has been retained as its interim chairperson. The PIC has added two new chartered accountants to the board – Brian Mavuka and Martinus de Jonge.
Daybreak did not immdiately reply to a request for comment.
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.
