Zeder is debt free after sale of Pioneer Foods and Quantum Foods
The transactions ensured Zeder is well capitalised during the crisis, says CEO Norman Celliers.
Zeder has received its cash proceeds of R6.41 billion from the sale of Pioneer Foods to Pepsi-Co. Zeder has also received the R30 million in cash proceeds for selling its 32.1 percent stake in Quantum Foods.
After settling some debt obligations, paying special dividends to shareholders, and buying back some of its shares, Zeder is left with a R1.17 billion cash balance and no debt at the moment.
“In hindsight, it was a timely transaction that ensured the group is well capitalised during this time of crisis,” Zeder CEO Norman Celliers said.
Pioneer Foods first announced in 2017 that it had been approached by a party to "explore a material transaction". But the deal fell through after the downgrade of SA’s sovereign debt rating, which the food producer said changed the interested party's plans. When the Pepsi-Co bid was announced in mid-2019, it gave Zeder an opportunity to offload the business at a time when it was struggling due to a consumer-spending slump and pushback against food price increases in SA.
However, selling Pioneer Foods, which accounted for 54 percent of Zeder’s investment portfolio, means Zeder is no longer as big as it once was. But Norman said notwithstanding the group’s reduced size, he believes that the remaining investments present significant opportunities to grow value for its shareholders.