JSE-listed integrated poultry producer Astral Foods has disposed of its 9.8% interest in Quantum Foods for R141.7-million.
“At the time Astral acquired the 9.8% equity stake in Quantum Foods in June 2020, there were unmitigated risks the group had to manage. These risks centred around securing the supply of live broilers to Astral’s County Fair operation in the Western Cape from Quantum.
“Quantum supplies Astral with approximately 600 000 broilers per week for further processing, about 35% of County Fair’s total slaughter capacity,” explains Astral CEO Chris Schutte.
A five-year term remains on the existing broiler supply agreement, and Astral has sufficient time to implement mitigating actions should the supply agreement come under threat at the end of the contractual period.
“The unsolicited offer from Country Bird has afforded Astral the opportunity to divest of its passive minority interest in Quantum, as it was never intended to be a long-term investment for the group,” he points out.
This cash injection contributes positively to rebuilding Astral’s balance sheet that was impacted negatively by an array of headwinds in 2023, he adds.