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The Citizen
5 days ago
- Business
- The Citizen
PIC stuffs more funds into Daybreak Foods, after chicken catastrophe
NSPCA and business rescue professionals are working together to achieve what those responsible – and being paid – failed to do. It took a public outcry and the killing of thousands of starving chickens to get people to act against years of poor management at Daybreak Foods, the large poultry producer owned by the Public Investment Corporation (PIC). Complaints to the National Council of SPCAs (NSPCA) about starving chickens eating each other alive finally prompted intervention in April. The NSPCA said in a statement that it has laid criminal charges against the then directors of Daybreak Foods following the 'large-scale animal welfare disaster that has captured global attention'. 'In this catastrophic failure, that has sent shock waves throughout the world, more than one million birds were subjected to extreme neglect, resulting in widespread suffering and death. 'Following extensive on-site investigations, the NSPCA uncovered overwhelming evidence of gross negligence, systemic mismanagement, and a complete abdication of responsibility by Daybreak's leadership. These failures were not only inhumane but criminal in nature, prompting the NSPCA to take legal action. 'We will now work closely with the South African Police Service and the National Prosecuting Authority to pursue justice on behalf of the animals that suffered,' says the NSPCA. ALSO READ: Business rescue for stricken chicken producer Daybreak Foods Business rescue Since the recent problems came to light in May 2025, the PIC has appointed a new board of directors and pledged more than R200 million in additional funding. It said that it was 'deeply disturbed' by reports of culling and cannibalism among the poultry stock at Daybreak Foods' farming operations. Despite being the sole owner of Daybreak Foods, the PIC quickly distanced itself from responsibility. 'The board and management of Daybreak are responsible and accountable for the operations and finances of the company,' it said, adding that it would nevertheless continue to support Daybreak and has provided capital allocations to ensure the company's liquidity. Daybreak Foods was placed into business rescue on 20 May. The PIC has expressed its support for the business rescue process. 'The PIC is of the firm belief that the company can be rescued – and must – be rescued, and that business rescue is the best path to preserve the company's value and potential, saving approximately 3 000 jobs, and importantly, realise returns for clients and their beneficiaries on their investment. 'The PIC has already undertaken several measures to contribute towards stabilising Daybreak Foods, which includes the injection of R74 million in working capital, that is intended to address the company's immediate liquidity needs,' it said. Tebogo Maoto, senior business rescue practitioner (BRP) for Daybreak Foods, said in response to questions that the BRP welcomes the PIC's funding support, which will provide the much-needed liquidity to implement the emergency phase of company's business rescue proceedings. 'The PIC funding will be utilised for making payments for critical operational costs, including salaries whilst the business rescue plan is being developed (to be published on 22 August 2025). 'The BRP will continue to engage with the funders and shareholder to address the additional liquidity support needed for the emergency phase of the business rescue process, and to seek a strategic equity partner. 'The BRP has taken full management control of the company and is working closely with current management in the interest of all stakeholders. The PIC, as a shareholder and lender, is not involved in the company's operations. 'The BRP engages the PIC on a regular basis, providing updates on the status of the company's business rescue proceedings,' says Maoto. He says that only the hatchery and breeder operations are currently being run at Daybreak Foods, and that the proposed business rescue plan will deal with the manner in which the company's other operations will be reactivated in order for it to reach break-even and turn a profit. 'The BRP cannot comment on the PIC's future plans, save to state that it remains committed to rescuing the company,' says Maoto. ALSO READ: SPCA lays charges against Daybreak Farms' bosses NSPCA The NSPCA said it is currently closely involved with many aspects of Daybreak's chicken farms and continues to monitor the situation carefully. 'The NSPCA remains actively involved. We receive weekly reports from Daybreak Foods, which include delivery notes for feed, mortality figures, and other key welfare indicators. We verify this information through physical inspections. 'We conduct on-site inspections, with additional assistance from the local SPCAs with jurisdiction over the relevant sites, to assist with ongoing oversight. 'At present, there are no immediate welfare concerns. Operations have scaled down significantly, with only the two breeder sites in Limpopo still active. While rearing has not resumed, the limited scope of operations makes oversight more manageable at this stage,' according to a spokesman for the NSPCA. Asked if the NSPCA has insight into the purchase of food for the chickens, he says that the weekly reports provide oversight. 'However, we are aware that Daybreak is currently under significant financial strain and has a long list of creditors. While feed has been provided consistently thus far, we are unable to confirm how long this can be sustained.' Daybreak Foods currently keeps approximately 220 000 breeder birds in two farms in Limpopo, but has submitted a formal request to the NSPCA to resume breeder operations by introducing additional breeder stock. 'We are scheduled to meet with them to discuss this proposal and assess the potential welfare implications,' he added. That the NSPCA should agree to a private company expanding operation is, in this case, necessary – the pictures of neglected chickens prove this. ALSO READ: Chicken farm funded by PIC fails to reverse court order against inhumane practices Corporate spin This reality is far removed from the corporate image portrayed by Daybreak Foods. Its website speaks of 'dedication and a commitment to excellence' and describes Daybreak Foods as a prominent player in the poultry industry. 'Our journey has been marked by continuous innovation, sustainability efforts, and a focus on delivering the best to our customers. Today, Daybreak Foods stands as a testament to hard work, resilience, and a relentless pursuit of quality, proudly serving communities with products they can trust. Daybreak Foods is currently a level 8 B-BBEE contributor, and we strive to improve our score through a range of initiatives. 'Daybreak Foods is one of the largest integrated poultry producers in SA. Our core purpose is to maintain a unique position that allows us to reshape how we remain part of 'The Great South African Family' while growing the business portfolio. As we continue to grow, we are embracing our responsibility to drive positive change, solve problems, and make society a little better every day. 'Our values directly link the business activities to our responsibilities towards our stakeholders – including shareholders, management, employees, customers, the environment, society and government,' it says. In reality, it couldn't pay salaries or the monthly fee to access e-mails and related information technology services. Hopefully, the new directors appointed by the PIC will set things right. They seem to have the right credentials, including five agricultural and veterinary specialists – many with secondary business degrees – as well as two accountants from the PIC. The question remains: What is wrong in SA that things must fall apart and become a public embarrassment before efforts are made to fix it? Wouldn't it be easier to get things right the first time? This article was republished from Moneyweb. Read the original here.
Daily Maverick
29-06-2025
- Business
- Daily Maverick
Plucked — Trouble at Daybreak Foods as Altron halts services
Poultry producer Daybreak Foods, which has been in the news for all the wrong reasons, has been left without IT services after failing to honour its payment agreements with Altron Digital Business. The suspension is having a troubling operational impact and complicates the business rescue process. Altron Digital Business has suspended IT services at Daybreak Foods, further disrupting critical operations at the poultry producer and complicating its business rescue efforts. 'The temporary shutdown of the IT services by Altron Digital Business has negatively affected the business rescue proceedings in respect of the due diligence process,' said Tebogo Maoto, Daybreak's senior business rescue practitioner. Key functions including employee communication, payroll processing, payment to essential suppliers and email services have all been affected, hampering efforts to stabilise Daybreak Foods. Despite a payment of R1.4-million made on 31 May to restore services, Altron has refused to lift the suspension, citing unresolved historic debt, which is now part of the business rescue legal process. Altron confirmed that although payments have been received, they did not satisfy the terms of a settlement agreement reached earlier this year to address Daybreak's long-standing debt. 'The issue of non-payment has been a persistent challenge for over 12 months,' Altron said. It added that it continued providing services and seeking solutions, but was forced to suspend IT operations because of Daybreak's failure to comply with the agreement. Talks with the business rescue practitioner were continuing in the hope of securing a grace period to resume essential services, and the matter was now with the lawyers 'to find a settlement'. The IT shutdown compounds an already dire financial and operational crisis. Daybreak held two consecutive online Q&A sessions for creditors and employees – the first on Monday, 23 June, and a follow-up the next day – that laid bare the company's deepening financial woes and the impact on workers. During the Monday session, company representatives revealed that Daybreak was 'not able to pay creditors' and was 'in financial distress'. This stark admission set the tone for a Tuesday session centred on workers' salary payments, due on 25 June, and the increasingly desperate situation they face. During the session, workers were told that some company functions had been disrupted and that it had 'limited funds in the bank' and 'insufficient funds at this stage to make payments of the salaries'. Faced with unpaid wages and no clear resolution, one employee voiced the harsh reality confronting many: 'Daybreak needs to retrench employees.' This reflects the desperation among staff, who see retrenchment as the only way to access UIF benefits and survive financially. Daybreak, however, said it was actively working to provide relief to employees. It said the process for UIF claims had been expedited and it was hopeful of securing funding to help workers during this crisis. Animal welfare crisis The roots of Daybreak's collapse run deep. Earlier this year, investigations exposed systemic animal welfare failures at the company's broiler operations. More than 1 million chickens died or suffered prolonged distress. The National Council of SPCAs (NSPCA) called it 'a grave and morally reprehensible failure' and images of emaciated birds packed into overcrowded sheds and cannibalising one another shocked South Africans. The Johannesburg High Court intervened on 23 May, ordering Daybreak to stop inhumane culling, provide adequate nutrition, halt new chick placements and grant full access for inspections. The court criticised the company's leadership for 'financial mismanagement of the available funds', which directly contributed to the animal welfare crisis. In response to mounting pressure, Daybreak entered voluntary business rescue proceedings – a move that raised questions about transparency and accountability. Board chairperson Bojane Segooa resigned amid public outrage over a R625,000 payout to her, and Daybreak's majority shareholder, the Public Investment Corporation (PIC), faced scrutiny for oversight failures. Workers and contractors remain unpaid, and the NSPCA continues to pursue criminal charges. Now, with Altron's suspension of IT services, the business rescue process faces a critical hurdle. The practitioner's ability to access historic data and communicate effectively is severely compromised, threatening efforts to stabilise Daybreak and protect the interests of creditors, employees and animals alike. Maoto said he was confident that an amicable solution with Altron would be found in due course, but the path forward remains uncertain. For a company still reeling from one of South Africa's most shocking corporate and animal welfare disasters, the IT shutdown is a stark reminder that the crisis is far from over. A history of failure Founded in 2001 as a small-scale poultry operation, Daybreak Foods grew to become a notable supplier of fresh and frozen poultry products in South Africa. In 2005, it was acquired by Afgri, a large agricultural services group historically owned and managed by white South African interests, for R110-million, as Afgri re-entered the broiler market. Under Afgri's management, Daybreak operated within an integrated agricultural conglomerate that included feed mills and abattoirs. Despite this, the company faced sector-wide challenges such as volatile feed costs and competition from cheaper imports. In 2015, Afgri sold its poultry operations to a black economic empowerment (BEE) consortium led by Matome Maponya Investments, with financial backing from the PIC. This transfer was part of a broader government initiative to increase black ownership in agriculture. The company was rebranded as Daybreak Farms and later Daybreak Foods. The PIC held a significant share alongside the consortium and employees. Since the BEE acquisition, Daybreak's difficulties have only escalated. Years of financial strain, governance lapses and operational mismanagement culminated in a liquidity crisis. Despite the PIC's full control and a R74-million capital injection, unpaid debts surpassed R140-million, and a request for a R250-million bailout was declined earlier this year. Leadership instability included four CEOs resigning in four years, leaving workers unpaid and operations stalled. Political pressure intensified as the Democratic Alliance (DA) called for parliamentary hearings and an investigation by the Financial Sector Conduct Authority into the PIC's oversight failures. The DA condemned labour abuses, animal cruelty and mismanagement, highlighting unpaid workers and the mass euthanisation of more than 350,000 chickens under dire conditions. The party also filed a Public Access to Information Act request demanding that the National Treasury disclose the steps it had taken after the Mpati Commission of Inquiry made recommendations to rectify issues related to PIC governance. With public funds exceeding R1.4-billion at stake, the DA has demanded transparency and accountability. The continuing IT shutdown and stalled business rescue efforts deepen uncertainty, leaving thousands of workers and hundreds of thousands of chickens caught in the fallout. DM
Daily Maverick
28-05-2025
- Business
- Daily Maverick
Daybreak Foods: Chicken producer hopes business rescue will hatch a turnaround
Creditors and almost 3,000 employees may finally see some resolution as the first business rescue meetings for beleaguered chicken producer, Daybreak Foods, kick off next week. Daybreak Foods, which has been in the spotlight over the past two months for animal cruelty, mismanagement, failure to pay staff and failure to pay contractors, has successfully applied to be placed under business rescue. Under the Companies Act, business rescue practitioner Tebogo Maoto is required to convene the first meeting of creditors and employees within 10 days of his appointment. The first meeting of creditors will be held virtually through Microsoft Teams on Monday, 2 June at 10am. The first meeting of employees will also take place virtually through Microsoft Teams on Tuesday, 3 June at 10am. In a notice, Maoto said the formal agenda for the meetings would be communicated to all affected parties in due course. In the interim, affected parties may address any queries they have directly to Motau at [email protected] In a media statement, the Public Investment Corporation (PIC), a major creditor and shareholder in Daybreak Foods, said it was of the 'firm belief that the company can be rescued and must be rescued, and that business rescue is the best path to preserve the company's value and potential, saving approximately 3,000 jobs, and importantly, to realise returns for clients and their beneficiaries on their investment'. Maoto was formally appointed as the senior business rescue practitioner (BRP) of Daybreak Foods on Thursday, 22 May 2025, after the company was placed under voluntary business rescue two days earlier. Maoto has significant experience in the field of business rescue, turnarounds and corporate restructurings, both in South Africa and in cross-border mandates. This extends to the turnaround and restructuring of various non-listed companies, including York Timber, Adax Bioenergy (Sierra Leone), Karstern Boerdery and Premier Hotel OR Tambo. A statement from the company notes that the business rescue proceedings for Daybreak Foods will focus on stabilising its ongoing operations, while Maoto assists with the development of a turnaround strategy and finding solutions to the funding shortfalls of Daybreak Foods. The PIC has already undertaken several measures to contribute towards stabilising Daybreak Foods, which include the injection of R74-million in working capital, intended to address the company's immediate liquidity needs. Daybreak Foods' interim chairperson Dr Charlotte Nkuna commented: 'We welcome the appointment of the BRP as part of the collective effort, together with the Public Investment Corporation, to rescue the Company and save approximately 2,800 jobs. We are confident that the business rescue proceedings will help Daybreak Foods to achieve a credible turnaround plan in the interest of all our stakeholders.' Daybreak Foods has a legal moratorium on any legal and/or enforcement actions being instituted against it, while the company's board and the BRP prepare the necessary proposals to rescue the company from its financial distress. DM
IOL News
27-05-2025
- Business
- IOL News
Daybreak Foods enters business rescue as financial troubles mount and 2,800 jobs hang in the balance
State-owned poultry producer Daybreak Foods has started business rescue proceedings Image: NSPCA State-owned poultry producer Daybreak Foods has entered business rescue due to financial difficulties with Tebogo Maoto appointed to lead efforts to secure funding and protect around 2,800 jobs. IOL previously reported that the company sought approval from the Public Investment Corporation due to severe financial problems made worse by the culling of underfed chickens and protests from workers over unpaid salaries. Last week, Johannesburg High Court issued a final order against Daybreak Foods, following legal action by the National Council of SPCAs (NSPCA) over allegations of animal cruelty. The ruling, handed down on Friday, compelled the poultry producer to implement a series of measures aimed at addressing animal welfare concerns at its Limpopo facilities. The court rejected Daybreak's claim that a R74 million cash injection from the Public Investment Corporation (PIC) had resolved the crisis. In a statement, Daybreak Foods said Maoto brings extensive experience in business rescue, turnarounds, and corporate restructuring, both within South Africa and across borders. 'The business rescue proceedings will focus on stabilizing operations while developing a turnaround strategy and addressing funding shortfalls,' the company said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Daybreak Foods was placed under voluntary business rescue on May 2025 after a resolution filed by its Board in terms of Section 129(1) of the Companies Act. 'We welcome the appointment of the BRP as part of the collective effort, together with the Public Investment Corporation to rescue the Company and save approximately 2 800 jobs," Daybreak Foods' interim chairperson, Dr Charlotte Nkuna said "We are confident that the business rescue proceedings will help Daybreak Foods to achieve a credible turnaround plan in the interest of all our stakeholders.' In terms of Section 133 of the Act, the poultry producer has also been granted a legal moratorium protecting it from legal and enforcement actions while the Board and BRP prepare proposals to rescue the company from financial distress. "The Daybreak Foods Board, in conjunction with the PIC, in its capacity as the shareholder and creditor, will support the BRP to develop and implement a sustainable business rescue plan that will be aimed at addressing its short and long-term funding needs, but also ensure future sustainability and profitability," the statement concluded. IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
