Goodman Fielder Limited (GFL) has sold its national poultry business, Steggles Limited, to a privately owned Australian
poultry company, Bartter Pty Ltd, for $131.5 million.
Goodman Fielder Managing Director, Commercial Group, Doug McKay, said the sale of Steggles, and recent acquisitions,
will strengthen Goodman Fielder, result in a more consistent earnings growth and improve financial performance.
"We decided to sell our livestock operation because it had limited synergies with our other consumer foods businesses
in Australasia," Mr McKay said.
"This is an excellent result for both parties because it is a good outcome for Goodman Fielder shareholders and enables
Bartter to become a more effective national poultry company."
The Chairman of Bartter, Mr Peter Bartter, said the company will now have a significant national operation that is
better placed to service its customers
"It is an exciting opportunity for our company and its employees, both old and new, and our focus now is to transform
the new business into a world class operation and one of Australia's leading food companies," Mr Bartter said.
Bartter will acquire Goodman Fielder's 50 per cent holding in Steggles Foods Products Pty Limited, a joint venture in
processed chicken products with US food group, OSI International Foods, as part of the overall transaction.
The sale price of $131.5 million is comprised of $96.2 million in cash and $35.3 million in vendor finance. The terms
and conditions of the vendor finance are on a fully commercial basis.
The Steggles sale will result in a write-down of the asset value of the business which will be recorded as an
extraordinary after tax loss of $45 million in the 1999 financial year by Goodman Fielder.
The extraordinary loss will be separate to abnormals flagged at the half year, including Bunge Defiance integration
costs and restructuring costs by other Goodman Fielder businesses. Goodman Fielder will use the net proceeds of the sale
to reduce debt and leverage the subsequent balance sheet flexibility to make further investments in our core businesses.
Bartter was advised on this transaction by Macquarie Bank.