Pioneer mum on nixed deal
There is speculation about the details of a potential deal that did not materialise after SA’s credit rating was downgraded
Phil Roux, the CEO of Pioneer Food Group, has clearly spelt out that "internationalising" the company is a key element of his longer-term growth strategy for the food company. A cautionary announcement on March 7 stirred up expectations that a big step towards achieving this goal was imminent. "The company has been approached to explore a material transaction," Pioneer noted. But it was a doomed deal. On May 21 Pioneer announced in another release: "Due to the recent sovereign debt rating downgrades in SA and the potential for additional downgrades, the parties have decided to discontinue negotiations at this time." It made Pioneer the first major victim of ratings downgrades by the big three ratings agencies that followed swiftly in the wake of President Jacob Zuma’s axing of Pravin Gordhan as finance minister on March 30. S&P was the first to move. It downgraded SA’s sovereign (foreign currency) rating on April 3 to a junk (noninvestment grade) BB+ rating. The agency cut SA’s loca...
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