The board of RCL Foods has agreed to the formal separation of the firm’s Rainbow business, which covers its poultry and feed operations.
The company’s next steps will be to unbundle fully this business from RCL’s Value-Added Brands division to shareholders, and its listing on the Johannesburg stock exchange, RCL Foods reports.
Preparations for this development began in 2021 with a review of the business. Since then, they have explored different options for the separation of Rainbow. At the same time, a turnaround plan has been in progress to improve performance, with the aim for Rainbow to become a “sustainable, market-leading, and low-cost producer,” according to the company.
In support of the decision to unbundle Rainbow, the RCL board says it will allow the businesses to follow different growth ambitions and investment plans.
Already, the operations have been separated. However, details are still to be completed, such as financing arrangements, separation of support services, and stakeholder engagement.
The board stressed that it is “committed to transitioning the Rainbow business in a responsible manner which preserves the heritage and key strengths of Rainbow, and is in the best interests of Rainbow customers, staff and other key stakeholders.”
Listing is expected to take place within a few months, according to RCL Foods’ CEO Craig Cruickshank, reported the local Independent Online. The move will allow shareholders to choose to invest in the poultry and feed business or RCL’s value-added products, he said.