MANAMA: Delmon Poultry Company, Bahrain’s biggest supplier of broiler chicken, is close to starting share swap negotiations with General Poultry Company (GPC), the country’s biggest supplier of locally-produced fresh eggs, for their proposed merger.
In a filing to Bahrain Bourse on Sunday, Delmon said “preliminary studies on the swap ratio are almost in the final stages and completion is expected next month” leading to negotiations with GPC.
The chicken supplier also disclosed that it would appoint a legal advisor for the transaction after the swap negotiations are complete.
Last June, Delmon announced the appointment of KPMG Fakhro as independent financial advisor to provide due diligence and valuation for the consolidation of the two companies.
Plans for the merger first came to light in February last year in a bourse disclosure by Delmon.
Established in 1980, Delmon Poultry Company is a public shareholding company supplying up to 80 per cent of Bahrain’s broiler chicken.
Operations
Current operations of the company include a hatchery in Buhair, a feedmill in Mina Salman and a processing plant in Hamala.
It reported sales of BD11,134,009 for the period from January to September 2021 as against BD10,988,816 for the same period in the previous year.
Over the same period, Delmon saw its profit plummet from BD755,205 to BD322,515.
Accordingly basic earnings per share came down to 10.54 fils for January to September 2021 from 24.68 fils for the same period of 2020.
Mumtalakat, Bahrain’s sovereign wealth fund, owns 15pc stake in Delmon and fully owns GPC, which was established in 1977.
Officials have announced plans to increase Delmon’s poultry production from nine million to 20m chicken while GPC launched a major expansion in November 2020 aimed at doubling its capacity to nearly 100m eggs a year.
Mumtalakat chief executive Khalid Al Rumaihi has in the past spoken about merging operations of portfolio companies to “generate synergies, improve efficiency and increase profitability.”
avinash@gdn.com.bh
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