The Public Investment Corporation (PIC) is in a frantic last-minute effort to secure R500 million in funding to prevent the collapse of struggling poultry producer Daybreak Foods, reported the Sunday Times. Without the cash injection by Friday, the company faces liquidation, putting 3,400 jobs at risk.
Failed Funding Plea
The PIC sought emergency funding from the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF) but was unsuccessful, reported the newspaper.
A liquidation application, brought by creditors including Lakat Chicken, is set to be heard in the Pretoria High Court on Tuesday.
In a letter seen by the Sunday Times, PIC chief investment officer Kabelo Rikhotso warned: “[The] PIC was advised on May 14 that Lakat Chicken was provided a provisional order, pending finalisation of the process on the return date… We have been advised by our legal counsel that the pleadings suggest that there is limited to no prospects of successfully opposing liquidation.”
Desperate Measures
The PIC has appointed a new board in a bid to salvage Daybreak, which has already received R250 million from the Government Employees Pension Fund (GEPF). However, the additional R500 million is critical to settling creditor claims.
The letter stated: “The PIC requests the approval of the requested R500m facility to assist in settling creditor claims, including the current liquidation claims… Release of the funding would decisively alter Daybreak’s financial position.”
Jobs on the Line
If liquidation proceeds, thousands of workers, including farm employees and contract growers, could lose their livelihoods.
The PIC maintains that Daybreak can remain viable if properly managed, stating: “For the PIC and its clients, the investment case for Daybreak is informed by the fact that, if the company is properly managed, it has and can continue to generate cash-positive revenues.”
Uncertain Future
By Friday, the funding request remained unmet, with sources indicating reluctance from financiers to commit further capital. The PIC said in a statement: “Engagements with PIC clients, the Daybreak board and other stakeholders continue, and further outcomes will be communicated when approved.”
As the deadline looms, the fate of Daybreak Foods and its workforce hangs in the balance.
3 Comments
Hasn’t the PIC lost enough money with their bad investments all because of BEE referrals…now you will see top heads just dissappear under the radar….
Hasn’t the PIC lost enough money with their bad investments all because of BEE referrals…
Daybreak management is totally failing on this one, nihlulekile klaar. Just sell the company to Astral or Afgri once because you are even failing to pay your subcontractors (Cleaning company), what a disgrace of not paying people for over 2months but every permanent individual must get their salaries sies.
Hand the company over to people who can manage it cause clearly you guys are failing and it shows that there are incompetent employees at the head office, you should consider running crèche’s not big companies….