Tiger Brands Rises Most in Two Years as Nigeria Aid Haltedby
Chairman Dangote and three directors quit Nigerian company
Tiger Brands reviewing options for 63.35% shareholding
Tiger Brands Ltd. rose the most in more than two years after South Africa’s largest food producer said it won’t provide further financial assistance for its struggling Nigerian unit.
The maker of Jungle Oats and Black Cat peanut butter rose 5.5 percent, the most since May 2013, to 328 rand per share at the close in Johannesburg.
“Tiger Brands is currently exploring various alternatives with respect to its shareholding” of 63.35 percent in Tiger Branded Consumer Goods Plc, formerly known as Dangote Flour Mills, the company said in a statement Monday.
Tiger Brands had warned investors in May the company may need to raise finance for the Nigerian milling business through a sale of shares after writing down 954 million rand ($66 million). The food producer bought Lagos-based Dangote Flour Mills for about $150 million in 2012. Growth in Africa’s largest economy has dropped to the slowest pace this decade following a plunge in prices for oil, its main export, while currency restrictions have also brought unease to businesses and investors.
“The business has been losing a lot of money; there’s a lot of debt in Dangote Flour,” Anthony Geard, an analyst at Investec Ltd. in Cape Town, said by phone. “If Tiger walks away from it they’re walking away from a big liability and ongoing losses.”
The Nigerian-unit’s chairman, billionaire Aliko Dangote, and three other directors resigned from the company, Tiger Branded Consumer Goods said in a separate statement on Monday.
Chief Executive Officer Peter Matlare said in September he would step down at the end of the year.