Money and Markets

Dubai-based owner of Lancewood cheeses and Denny mushrooms wants to list SA food firm on the JSE

Business Insider SA
  • The SA food group Libstar, which owns Lancewood and Denny, is planning to list on the JSE.
  • Libstar is owned by a large Dubai-based private equity firm Abraaj.
  • The Bill and Melinda Gates Foundation and the World Bank reportedly ordered an investigation into the misuse of money in one part of the Abraaj business.

The Dubai-based firm Abraaj Group is pushing ahead with the JSE listing of its South African food group Libstar Holdings.

The private equity firm bought a controlling stake in Libstar in 2014 from a consortium of owners, which included Old Mutual.

Libstar owns Cape Herb & Spice, Denny, the dairy group Lancewood, and other food brands. The company's subsidiary Finlar supplies McDonald's with meat and chicken products. Other subsidiaries, including Ambasador Foods, Amaro Foods, and Rialto, supply products to Woolworths.

Founded in 2002 by Pakistani businessman Arif Naqvi, the Abraaj Group is one of the biggest private equity investors in emerging markets.  

Naqvi recently ceded control of the fund-management unit of Abraaj amid allegations that money in the company’s health fund had been misused. The Bill and Melinda Gates Foundation and the World Bank reportedly ordered an investigation into the money invested in the fund, which invests in the building of hospitals in Pakistan and Nigeria.

Abraaj dismissed the reports as "inaccurate and misleading" and said a KPMG review of the health fund found no misuse of funds. 

Aabraaj holds almost 71% of Libstar. SA's Public Investment Corporation (which manages civil servant pensions) own 19%. Libstar management currently hold almost 10%.

Key management will remain "materially" invested in Libstar says Andries van Rensburg, co-founder and CEO.

"The capital that we raise from the listing will support our growth prospects and allow us to, amongst other things, invest further in our categories and manufacturing facilities."

The company reported revenue of R8.9 billion for the past financial year, which grew by 10% from the previous year. 

Prior to the listing, Libstar expects to conclude a BEE transaction which will see "the establishment of an employee share trust as well as a trust aimed at encouraging the development of black-owned businesses within Libstar’s value chain".

No date has been set for the listing.

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