Bright Food demands Tnuva fire hundreds

Tnuva

The Chinese government company is disappointed in the Israeli food producer's performance and is imposing a streamlining plan.

Chinese company Bright Food is extremely disappointed with the weak performance of Tnuva Food Industries Ltd. since its acquisition of Israel's largest food producer. Forecasts on the company's performance have not been met and newly appointed CEO Eyal Malis is now being asked to implement a streamlining process that will involve hundreds of layoffs. The program will include merging units and logistics systems and cutting out duplicate positions.

At present the streamlining is a declaration of intent and details of the plan have yet to be formed. There have been no talks between Tnuva's management and the workers committee, which can be expected to oppose any measures. The workers committee has already said that it would not lend a hand to a "massive layoff of employees."

The demand to implement a streamlining plan has come directly from controlling shareholder Bright Food, which is coping with major damage cause to it by Tnuva. As "Globes" has previously reported, the company's value has plummeted, sales and profit forecasts have not been met, and Bright Food has been compelled to cancel the raising of funds it had planned to finance Tnuva's acquisition.

Bright Food holds Tnuva through its fully-owned subsidiary Bright Food Singapore. To finance the acquisition, and as part of Chinese government owned Bright Food's privatization, the company planned spinning off from Bright Food Singapore another subsidiary Bright Food Dairy, traded on the Shanghai Stock exchange. That company had planned to raise NIS 5.4 billion on March 1.

But in February, ahead of the public offering, Morgan Stanley valued Tnuva at just NIS 5.37 billion, with Bright Food's holding worth only NIS 4.13 billion, 37.6% below the value Bright Food actually paid for Tnuva.

Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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