Tiger Brands rose the most in more than a month after South Africa’s largest food producer said it will not provide further financial support for its struggling Nigeria unit.
Tiger Brands warned investors in May it may need to raise finance for Dangote Flour Mills through a sale of shares after writing down 954 million rand ($66 million). The food producer bought Lagos-based Dangote Flour Mills for about $150 million in 2012.
“Tiger Brands is currently exploring various alternatives with respect to its shareholding,” the company said in a statement Monday.
Tiger Brands, the manufacturer of Jungle Oats and Black Cat peanut butter, rose as much as 5.2 per cent, the most since 25 September.
"The business has been losing a lot of money; there’s a lot of debt in Dangote Flour," Anthony Geard, an analyst at Investec Ltd. in Cape Town, said by phone. "If Tiger walks away from it they’re walking away from a big liability and ongoing losses."
The company’s Chief Executive Officer Peter Matlare said in September he will step down at the end of the year.
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