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Coca-Cola Amatil cuts SPC business value to zero

SPC-main2Coca-Cola Amatil has cut the value of its fruit and vegetable cannery SPC from $147 million before tax to zero for the 2018 year, but said the sale of the business is progressing well.

The company reported that several interested parties have toured the manufacturing facilities in Victoria’s Shepparton and SPC managing director Reg Weine said a number of non-binding indicative offers have been received, and the divestment process is on track to conclude by mid-2019.

The uncertain financial outcome of the sale of the company triggered the non-cash impairment from A$146.9 million before tax to a nominal value of zero for 2018.

“Specifics of these offers are confidential, but we’re seeing some solid Australian and international interest. Parties in this process clearly recognise the value in SPC’s iconic brands, the strategic location of our manufacturing assets in the heart of the Goulburn Valley, and our proximity to fast growing export markets like China,” Weine said.

“It also reflects the significant transformation of SPC’s Shepparton manufacturing site and the state-of-the-art processing and packaging capability that is available to potential buyers of SPC. The overall level of interest is recognition of the inherent value of Australian agricultural assets and the iconic nature of SPC and its market leading brands.”

The struggling Coca-Cola Amatil-owned company said the impairment did not affect SPC jobs, production or operations.

“While accounting standards necessitate this impairment, it does not reflect SPC’s market value or the offers received and doesn’t indicate any change to SPC’s publicly reported outcomes. We see a positive future for SPC as a market leader in processed fruit and vegetables. The sale process is about unlocking this future value,” Weine said.

CCA and the Victorian Government invested A$100 million over the last four years to modernised its tomato and snack cup production. It also introduced a new aseptic fruit processing system and pouch line at the Shepparton site. SPC also expanded its export range with China State Farms Agriculture Holdings Shanghai Corporation.

CCA announced that it would sell SPC following a review of the Victorian food unit in November 2018.

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