(Photo: Daybreak Foods/ Website)
The Public Investment Corporation (PIC), South Africa’s largest state-owned asset manager, is looking for a buyer for the struggling Daybreak Foods.
Daybreak, which was previously the largest contractor for poultry producers in the country and supplied feed to dozens of farms across several provinces, was put into business rescue in May last year.
David Masondo, deputy minister of finance and chairman of the PIC, told Bloomberg in an interview that the PIC intends to sell more than 60% of Daybreak.
“The PIC must get rid of 60% of the company because the PIC is a 100% shareholder. We must find an operational, strategic equity partner who will invest in the asset.”
The PIC has invested R1.7 billion in the Daybreak in the past decade.
Masondo says allegations of mismanagement, financial distress, regulatory issues and incidents of animal cruelty have plagued the company.
According to him, Daybreak apparently showed operational and financial improvements during the implementation of the business rescue plan.
Daybreak also forms part of the PIC’s unlisted portfolio company worth around R127 billion.
“There are distressed assets and we will have to get some specialists to work with the PIC to turn those assets around,” Masondo told Bloomberg.
Maroela Media previously reported that a farmer from Delmas had to watch thousands of his broilers turn to cannibalism in February last year because Daybreak Foods apparently stopped supplying feed to the farmer.
The National Animal Protection Association (NDPA) raided this farm a few days later after a third party notified the organization of rumors that farmers had not received enough feed from Daybreak since December 2024.
Also read: Struggling Daybreak looking for investors
(Archive photo: NDBV)
The first feed shortage was officially reported in December 2024 just before Christmas Day, when several farmers’ chickens were without food for a few days and trampled each other on the day the feed was thrown out. The other chicks simply died next to the feeding bowls from starvation.
A farmer who terminated his contract with Daybreak just before the fodder shortage told Maroela Media at the time that he saw this problem coming.
Meanwhile, Daybreak confirmed in September last year that 2,230 jobs were being cut.
A total of 1,898 employees were laid off at the Delmas and Sundra abattoirs. A total of 57 staff members at Daybreak’s head office have also been made redundant.
“Only 500 employees will keep their jobs to manage the company’s hatcheries and breeding farms. The affected workers can be re-employed in the future, should things improve and the business rescue plan is successfully carried out,” says the business plan presented last year.
Andrew Bateman, DA MP and the party’s deputy spokesperson on budgets, says the DA agrees that the PIC should dispose of its majority stake in the PIC.
“However, we note that the PIC has been trying to do this for more than a year without success. This is not surprising, since the PIC’s investment in Daybreak has been plagued by a long list of scandals from the beginning.”
Bateman says the PIC’s talk of getting an equity partner to invest in the company’s assets may be misleading and indicates “that it is about to pump millions into a failing business”.
Also read: OBK gives millions more to struggling Daybreak
(Photo: Provided)
The DA warns that the PIC must be careful about continuing to throw good money after bad money.
“The PIC’s investment now exceeds R1.7 billion and it is unlikely that much of this will ever be recovered. Daybreak is just one of many of the PIC’s ill-judged unlisted investments with friends of the ANC.”
The DA urgently calls for reform of how the PIC board and chairman are elected in order to free the institution from political control.
He emphasizes that Masondo cannot be the chairman of the PIC and insists that the PIC must be fully professionalized to protect the pension fund for civil servants (GEPF) and the other public funds it manages.