President of Dangote Group Aliko Dangote on October 25, 2010 in Johannesburg, South Africa.
CAPE TOWN – Tiger Brands announced on Monday that it had agreed to sell its 65.7 percent shareholding in its Nigerian unit, Tiger Branded Consumer Goods (TBCG), to Dangote Industries Limited (DIL) for a nominal $1.
A statement from Tiger Brands said DIL would provide TBCG with an immediate cash injection of approximately R700-million, sufficient capital “to stabilise the business and place it on a sustainable path”. In return, Tiger would sell its 65.7 percent shareholding in TBCG to DIL for $1 and write off around R700-million in shareholder loans and settle TBCG debt to the tune of another R400-million.
The statement said the transaction, which is subject to regulatory approvals, would “ensure that TBCG is maintained as a viable going concern, able to retain its employees and meet its obligations to its stakeholders”.
Tiger Brands said last month that it had decided to stop funding the loss-making unit.