October 10, 2012

French poultry integrator Doux is willing to sell its feed manufacturing plant Stanven for EUR15 million (US$19.3 million) by mid-November in order to improve its financial position.

The company filed for bankruptcy on June 1, with an observation period of six months. In early August a plan was presented for the liquidation of the fresh branch of the company.

This settlement resulted in a 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.

In its new scope, the poultry firm will employ 2,100 people, work with 300 integrated farmers and consolidate its turnover to an expected EUR535 million (US$687 million) in 2012. With the divestment of its fresh branch, which represented a loss of EUR20 million (US$26 million) in 2012, it is estimated to return to profitability immediately.

Cash flow remained positive in August, but it should go below EUR5 million (US$6.4 million) by mid-October. If Doux must repay the loan of EUR10 million (US$12.8 million) to Barclays, as was promised in late October, new sources of financing must be found and 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, the Doux Group will ask the court to extend the six-month observation period which ends in late November.