Daybreak Foods enters business rescue amid financial strain

SOUTH AFRICA – State-owned poultry company Daybreak Foods has officially entered voluntary business rescue following a series of financial and operational setbacks.

The company has appointed Tebogo Maoto as the business rescue practitioner (BRP) to oversee efforts to secure emergency funding and steer the operation through restructuring.

This follows a resolution filed by the Board in May 2025 in accordance with Section 129(1) of the Companies Act, which allows for voluntary business rescue when a company is in financial distress.

The appointment comes amid ongoing challenges, including employee protests over unpaid wages and the controversial culling of underfed chickens, which have intensified scrutiny on the company’s practices.

IOL previously reported that Daybreak sought assistance from the Public Investment Corporation (PIC), which holds a stake in the business, in a bid to resolve its worsening financial situation.

Although the PIC approved a financial injection worth US$4 million (R74 million), the Johannesburg High Court ruled last week that this intervention was insufficient to address the broader issues facing the poultry producer.

In a case brought by the National Council of SPCAs (NSPCA), the court issued a final order on Friday compelling Daybreak Foods to address allegations of animal cruelty at its Limpopo operations.

The order requires the company to implement a series of corrective measures aimed at improving conditions for the animals at its facilities.

The court also dismissed claims by Daybreak that the funding from PIC had already stabilized the business, noting that significant gaps remained.

With approximately 2,800 employees at risk of losing their jobs, the rescue plan is being closely watched by workers and trade unions alike.

In a statement, Daybreak Foods said Maoto has a track record in leading business rescues and corporate restructurings both within South Africa and in other regions.

The company confirmed that during the business rescue period, operations would continue under protection from legal and enforcement actions as stipulated in Section 133 of the Act.

According to interim board chairperson Dr Charlotte Nkuna, the rescue initiative is being supported by both the Board and the PIC, which is involved as both shareholder and creditor.

The primary goal, according to the Board, is to develop a workable rescue strategy that can address current funding needs while laying the groundwork for future stability and profitability.

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