Dangote Industries to buy over 65% of Tiger Brands Nigeria for $1

PHOTO_Aliko Dangote_25072014

President of Dangote Group Aliko Dangote on October 25, 2010 in Johannesburg, South Africa.

President of Dangote Group Aliko Dangote on October 25, 2010 in Johannesburg, South Africa.

PHOTO_Aliko Dangote_25072014

President of Dangote Group Aliko Dangote on October 25, 2010 in Johannesburg, South Africa.

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.