News

SPC write-down

By Alana Christensen

SPC’s owner has warned the market it will write down the value of the company following a number of offers to buy the Shepparton-based business.

There will be no changes to SPC jobs, production or operations as a consequence of accounting provisions, and it is ‘‘business as usual’’ at all SPC sites, according to SPC managing director Reg Weine.

Coca-Cola Amatil on Monday announced plans to revise the books, writing down the value of SPC from $146.9million to a nominal value of zero for the 2018 year.

SPC was offered for sale by Coca-Cola Amatil in November following a strategic review.

Mr Weine said the range of offers, both in size and structure, and the ‘‘inherent uncertainty’’ of the financial outcome of the sale process had triggered the decision about the carrying value of the company.

The announcement of the non-cash impairment indicates disappointment about the value of the offers received.

‘‘While accounting standards necessitate this impairment, it does not reflect SPC’s market value or the offers received and doesn’t indicate any change to SPC’s publicly reported outcomes,’’ Mr Weine said.

He said the SPC divestment process was proceeding well, with several interested parties touring SPC’s manufacturing sites in Shepparton and a number of ‘‘non-binding indicative offers’’ made.

The sale is on track to conclude by mid-2019.

‘‘Specifics of these offers are confidential, but we’re seeing some solid Australian and international interest,’’ Mr Weine said.

CCA claims to have invested $250million in the business since its purchase in 2004.

A $100million co-investment program by CCA and the Victorian Government during the past four years has modernised SPC’s tomato and snack cup production and introduced a new aseptic fruit processing system and pouch line at the Shepparton site.

A number of other investments has seen SPC grow its market share in tomatoes, baked beans and spaghetti, as well as introduce a world-first innovation of nutrient-rich fruit cups ProVital.

Significant capital investment has seen the upgrading of several areas of the business including a new high-speed snack line, new tomato processing line, new processing technology and automation.