February 18, 2019
Cola-Cola Amatil has updated the ASX on its progress to sell off its iconic fruit, veges and baked beans packager SPC – but it now values its assets at “zero”.
Last November, CCA announced it had concluded a strategic review of SPC and had decided to “proceed towards divestment”.
“We have received strong interest in SPC,” CCA told the ASX on Monday.
“The divestment process has proceeded to the first round of non-binding indicative offers, of which a number have been received from Australian and overseas parties and bidders are being short listed to proceed in the process.
“The strong interest reflects the many opportunities for growth in SPC, including new products and markets, further efficiency improvements, and leveraging technology and intellectual property.
“However, given the wide range of offers received, in terms of size and structure, and the inherent uncertainty of the financial outcome of the sale process, we believe it is prudent to recognise a non-cash impairment of the carrying value of SPC’s net assets held for sale of $146.9 million before tax in the 2018 full year accounts.
“This will reduce the carrying value of SPC’s net assets held for sale as at December 31, 2018, to zero.
“This non-cash impairment does not impact the underlying performance of the business or the group’s ability to pay dividends …
“At our Investor Day in November 2018, we indicated that we were expecting a full year underlying earnings before interest and tax loss for SPC of approximately $10 million for FY18.
“The indicative result for SPC is in line with that disclosure.
“As a result of the non-cash impairment of SPC and the trading loss for the year, the reported loss in ‘Discontinued Operation’ will be a total loss of approximately $120 million after tax. This does not impact our underlying result but will be reflected in our statutory result.”
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