In order to improve its financial position French poultry integrator Doux will attempt to sell its feed manufacturing plant Stanven for €15 million by mid-November.
Doux employees were informed of the company’s decision on Monday (October 8).
The plan was also presented at the Commercial Court of Quimper on Tuesday (October 9).
The company filed for bankruptcy on June 1, with an observation period of six months. A plan was presented in early August for the liquidation of the fresh branch of the company, which resulted thousand layoffs, but it allowed the rest of the group, subsidiaries and chicken exports of processed products, to continue to operate until the end of November.
The Doux family and Barclays bank are preparing a parallel continuation plan.
The administrators have contacted the court for their analysis of the situation at Doux. In its new scope, the poultry firm will employ 2,100 people, work with 300 integrated farmers and consolidate its turnover to an expected €535 million in 2012.
With the divestment of its fresh branch, which represented a loss of €20 million in 2012, it is estimated to return to profitability immediately.
This is especially true for the export division, which obtains higher prices, although this activity is dependent on maintaining export refunds from Brussels. The position of the processed products branch is more complex. The accounts are in the red since 1 June and the challenge is now to negotiate price increases with the mass distributers.
Feed mill sale
Cash flow remained positive in August, but it is expected to go below €5 million mid-October. Meanwhile, the company repaid part of its debt to farmers, has made an advance in the agricultural cooperative UKL, which is in serious trouble, and paid €3.2 million to carriers.
For Doux to repay the loan of €10 million to Barclays, as it promised in late October, it must find new sources of financing, and the divestment of the feed plant Stanven is an option.
To refine the recovery plan, carry out the restructuring of debt and rebuild its equity in connection with Barclays Bank and Saudi client Al Munajem (who promised to pay €12 million up front), the Doux Group will ask the court to extend the six-month observation period which ends in late November.