Cooks Food Group, which listed on the NZX's alternative exchange (NZAX) just six months ago with bold plans for growth, is selling up its operations.
In December the company announced it was to buy the Diamond and DYC brands from Goodman Fielder New Zealand for $12 million and said it
was looking to secure new equity funding for the acquisition.
Today group chairman Keith Jackson said Cooks had reached a binding but conditional agreement to sell its business assets to Australasian-based food group Hutchinsons, a subsidiary of Food Holdings.
Brands supplied by Hutchinsons in this country include Trident, Ryvita, Lurpak, Castello, Carrs and Bel Cheeses.
Under today's deal, Cooks is to transfer the acquisition agreement for Diamond and DYC to Hutchinsons, with Cooks receiving about $4 m for the trading assets and intellectual property rights associated with its existing brands.
Jackson said the deal would enable Cooks to eliminate most of the debt related to its initial acquisitions and recover recent costs associated with its expansion plan.
Cooks would keep its NZAX listing as a platform for assessing potential opportunities compatible with its initial objectives of owning assets in defensive segments of the domestic economy, he said.
When Cooks listed last October it amalgamated three businesses in its initial portfolio - Cotterill and Rouse, Sahara and Murdochs.
Jackson said the Sahara and the Olive Grove chilled brands were recently sold, with the sale effective from April 30.
Conditions on the deal with Hutchinsons include shareholder approval, to be sought at a special meeting in May.
- NZPA
