The Public Investment Corporation (PIC) has backed moves to place troubled poultry producer Daybreak Foods in business rescue in a bid to stave off its liquidation and save 3,000 jobs, deploying a high-powered team to put the company on a growth path.
The asset manager, which is one of Daybreak’s largest shareholders and creditors, said it believes the entity could still be turned around. The company is said to account for about 7% of SA’s poultry supply.
“The successful application to place Daybreak in business rescue paves a way to appoint a business rescue practitioner who will assist Daybreak to assess the extent of disruption to operations and produce a credible turnaround strategy for the business. In this regard, the business rescue practitioner will work closely with the Daybreak board of directors,” it said.
“The PIC has already undertaken several measures to contribute towards stabilisation of Daybreak Foods, which includes the injection of R74m in working capital that is intended to address the company’s immediate liquidity needs.”
The PIC, which marshals about R3-trillion in assets under management, has roped in former IDC CEO Tshokolo Nchocho to the board of Daybreak as part of efforts to reconstitute the board in bid to stabilise governance and operations at the company.
Other members of the reconstituted Daybreak board include Cythnia Nkuna, Lehlohonolo Andrew Makenete, Jack Bapela, Esethu Dazana, Brian Mavuka and Martinus Philipus de Jonge.
The problems besetting Daybreak, which was founded in 2001 with operations spanning four provinces, came to the fore late last year when it began paying suppliers and salaries late or not at all.
The National Council of SPCAs this month got a court order after starvation of 594,000 chickens in Daybreak’s facilities were exposed.
The PIC jumped in with a R74m bailout to, among other issues, pay for salaries, and prevent further starvation and cannibalism among its bird stock.
However, this would not be enough to keep the company afloat — with business rescue now the only viable measure to reset the company for a sustainable future.
“The Daybreak Foods Board, together with the PIC, will fully
co-operate with the business rescue practitioner to implement a sustainable turnaround strategy and plan to stabilise the business and ensure its viability,” the PIC said.
The PIC invested in daybreak in 2015, in a R1.2bn deal under its unlisted portfolio, which has often courted controversy.
One of the mandates given to incoming PIC CEO Patrick Dlamini is to clean up its multibillion-rand unlisted portfolio.
Dlamini’s appointment to one of the most sought-after roles in SA’s investment landscape was last week endorsed by the cabinet, with him set to replace outgoing CEO Abel Sithole, who is due to retire in July 2025.
Formerly Development Bank of Southern Africa (DBSA) CEO — a role he held for a decade until stepping down in 2023 — Dlamini takes over at the PIC in June, putting him at the helm of the largest investor in SA’s equities market.
PIC chair David Masondo said Dlamini was fit for purpose to lead the organisation and that one of his immediate tasks would be to address the asset manager’s pressing issues.
“His expertise in leading complex turnarounds, fostering operational excellence and driving sustainable growth positions him to advance the PIC’s investment mandate,” he said at the announcement of Dlamini’s appointment.
Masondo added that Dlamini, working with management, would be expected to apply his turnaround expertise to address the immediate concerns that confront the PIC, “specifically in its unlisted portfolio”.
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