Fiji Dairy Sells for $10million

FIJI - Southern Cross Foods (Ltd) has outbid the Tappoo Group to purchase Fiji Dairy Limited for $10million.
calendar icon 5 July 2012
clock icon 2 minute read

When making the announcement, Attorney-General and Trade and Industry Minister Aiyaz Sayed-Khaiyum said government had set a number of conditions for the sale of FDL, formerly known as Rewa Dairy Co-operative Ltd.

SC Foods will have to build chilling plants within the next four months, reports FijiTimes.

In addition, the CJ Patel Group subsidiary is expected to modernise the FDL factory as well as establish its Waidina farm.

Mr Sayed-Khaiyum said SC Foods would also be taking over the debts of FDL, which was about $17million.

He added that the sale was a going concern.

The price of FDL could either increase or decrease by the time the sale is finalised depending on whether the current sales of FDL increase and whether its debts decrease.

The minister said there was also a clawback system whereby there were repercussions if the company did not fulfil the conditions set by government.

Mr Sayed-Khaiyum said the sale process had taken time as the company was riddled with mismanagement.

"Rewa Dairy has been riddled with mismanagement for decades. When the accounts were audited there was a $5million hole that nobody could explain," said Mr Sayed-Khaiyum.

FDL executive chairman Adrian Sofield said the sale process should take between six to eight weeks.

At least 16 companies had shown their interest to purchase FDL.

A $25,000 deposit was required before the due diligence report of the company was released.

Only four companies paid in their deposit but two companies withdrew leaving SC Foods and Tappoo to continue bidding for FDL.

SC Foods will own 80 per cent shares in FDL and the other 20 per cent class B shares will be owned by farmers who form the Fiji Dairy Co-operative Limited.

The farmers would receive dividends but have no voting rights.

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