Tiger Brands Can Use Debt as ‘Firepower’ for African Purchases, CEO Says
FMCG SUPPLIER NEWS
Bloomberg - Sep 9th 2011, 10:10
Tiger Brands Ltd. (TBS), South Africa’s largest food company, said it can boost its levels of debt to make acquisitions across the continent as it expands outside its home market.
“We’ve got sufficient firepower to conclude any number of acquisitions we may want,” Chief Executive Officer Peter Matlare said in an interview after the company’s annual general meeting in Johannesburg today. Tiger Brands, which is ungeared at the moment, has the capacity to increase its net debt to equity levels to 40 percent, he said.
Over the next three to five years its businesses outside South Africa will contribute 20 percent to earnings from around 10 percent now, Matlare said. The company looks at “several acquisition opportunities” with a particular focus on Africa all the time, he said.
Acquisitions concluded last year in Ethiopia, Cameroon and Nigeria have perfomed to expectations. “But it’s early days yet,” Matlare said.
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