TasFoods Signs $2M Deal to Sell Pyengana Dairy, Eyes Debt Cut and Poultry Growth
TasFoods has agreed to sell its Pyengana Dairy business for $2 million, aiming to reduce debt and refocus on its poultry supply chain. The sale awaits shareholder approval with settlement expected by early November.
- Sale of Pyengana Dairy for $2 million plus inventory
- Shareholder approval required via upcoming Extraordinary General Meeting
- Proceeds earmarked to reduce NAB debt and strengthen poultry operations
- TasFoods to continue managing Pyengana Dairy under a paid services agreement
- Research Corporation and AgFood to hold nearly 13% of TasFoods shares post-sale
Strategic Divestment to Sharpen Focus
TasFoods Limited (ASX, TFL) has taken a decisive step in reshaping its business portfolio by signing a Business Sale Agreement to divest its Pyengana Dairy operations. The deal, valued at $2 million plus inventory, marks a clear pivot towards strengthening the company’s core poultry supply chain while addressing its debt obligations.
The sale agreement, inked with Research Corporation Pty Ltd and the AgFood Opportunities Fund, follows a period of limited market interest, with no other offers emerging since the company’s initial announcement in August. This exclusivity underscores the strategic alignment between TasFoods and the buyers, who will also acquire all current receivables, payables, and employee entitlements related to Pyengana Dairy at settlement.
Shareholder Approval and Transition Plans
Completion of the sale hinges on shareholder approval, with an Extraordinary General Meeting (EGM) scheduled in the coming weeks. TasFoods expects to finalise settlement by early November, contingent on the vote. Notably, the company will maintain operational involvement through a paid monthly services agreement, ensuring continuity and support for Pyengana Dairy’s growth trajectory under new ownership.
Post-transaction, Research Corporation and AgFood will collectively hold 12.94% of TasFoods shares, reflecting a significant stake that aligns interests between the divesting company and the buyers. Anthony Hall, a key figure associated with both entities, will continue to influence the business landscape as a non-executive director of the AgFood Fund.
Financial and Strategic Implications
The infusion of $1.7 million in cash, supplemented by up to $0.3 million in AgFood shares, will primarily be directed towards reducing TasFoods’ debt with the National Australia Bank (NAB). This deleveraging move is expected to improve the company’s financial flexibility and credit profile. Remaining proceeds will be invested in enhancing the poultry supply chain, a segment that TasFoods identifies as central to its future growth and profitability.
Beyond the immediate transaction, TasFoods signals an ongoing strategic review encompassing partnerships, vertical integration, and asset optimisation. The divestment of Pyengana Dairy is positioned as a catalyst for unlocking value and enabling the premium dairy brand to scale nationally and internationally under dedicated stewardship.
Looking Ahead
While the sale represents a significant shift, TasFoods’ continued operational role in Pyengana Dairy and the substantial shareholding retained by the buyers suggest a collaborative approach to growth. Investors will be watching closely how this realignment impacts TasFoods’ financial health and market positioning in the coming quarters.
Bottom Line?
TasFoods’ Pyengana Dairy sale sets the stage for debt reduction and sharper poultry focus, but shareholder approval remains the key hurdle.
Questions in the middle?
- Will shareholders approve the Pyengana Dairy sale at the upcoming EGM?
- How will the proceeds impact TasFoods’ overall financial performance and debt levels?
- What are the long-term plans for Pyengana Dairy under Research Corporation and AgFood’s ownership?
