Unga Group #ticker:UNGA expects to get Sh284.5 million from the sale of its bakery business and part of its stakes in its animal feed subsidiaries.
The company recently reached an agreement to sell Ennsvalley Bakery to BigCold besides signing deals to transfer part of the assets of Unga Farm Care and Unga Millers to joint ventures that the subsidiaries will own on a 50/50 basis with Nutreco International B.V.
The human and animal feed manufacturer has disclosed that it has Sh284.5 million worth of assets held for sale, referring to the proceeds it expects from the transactions.
“The assets and liabilities associated with the Nutreco and BigCold transactions are reported separately as held for sale,” Unga said in commentary accompanying its financial statements for the year ended June.
Nutreco and Unga Farm Care will invest in and establish an aquafeed joint venture in Kenya. The multinational and Unga Millers will form an animal feed and nutrition joint venture in Uganda.
“The new joint ventures and continued operational re-organization will set the company in a growth trajectory,” Unga said in a statement.
“More value-add partnership opportunities will be pursued while advancing automation opportunities in the base business.”
The transactions are expected to be completed by the end of the year.
Unga Group’s net profit rose 4.4 times in the year ended June, helped by tax refunds and receipt of payments from the government for past maize supplies. Unga did not declare a dividend, citing the need to reinvest in its human and animal feed operations.