It said, however, that all was not lost as shareholders had voted to support a rights issue to raise R144,5m to repay debt and fund more capital projects.
CEO Mike Davis brushed aside the setback caused by the termination of the merger talks, saying he was “excited” about prospects for further growth.
The company had invested in expanding its production over the past three years and now had the capacity to produce more than 50 million birds a year.
Country Bird, SA's third largest poultry firm, on Tuesday, 3 November 2009, confirmed that talks with Sovereign had collapsed but financial director Robbie Taylor declined to explain why.
Davis was equally reticent, citing a confidentiality agreement.
Country Bird owns nearly 23% of Sovereign and had wanted to steal a march on its rivals by acquiring Sovereign, possibly through a cash-and-share offer.
Taylor said Country Bird was happy to be a shareholder in Sovereign and would pursue alternative expansion strategies in SA and the region.
Davis said Sovereign's future was bright.
“We have undertaken a significant expansion plan over the past three years and will now be able to take advantage of our capacity to produce up to 52-million birds a year,” he said.
He was pleased that nearly 99% of the shareholders at a general meeting yesterday had voted in favour of the rights issue.
Source: Business Day
Published courtesy of
