RMB plays pivotal role in listing of Rainbow Chicken on the JSE

Media Release

3 July 2024

RMB plays pivotal role in the listing of Rainbow Chicken on the JSE

In June 2024, RCL Foods Limited (“RCL FOODS”) announced the separate listing of Rainbow Chicken Limited (“Rainbow”) on the Johannesburg Stock Exchange (“JSE”) and the subsequent unbundling of Rainbow from RCL FOODS (the “unbundling”). RMB acted as sole financial adviser to both RCL FOODS and Rainbow.

In addition to its role as financial adviser, RMB also led the extension of approximately R5bn in syndicated facilities to RCL FOODS and implemented a R500m general banking facility and additional ancillary facilities for Rainbow.

Rainbow is a market-leading, fully integrated poultry and animal feed producer in South Africa, with operations across the entire chicken production value chain. The company plays a major role in the national supply of chicken through a range of iconic and heritage South African brands. The unbundling is the result of an extensive two-year assessment by RCL FOODS, Rainbow, and RMB to develop an appropriate solution to support Rainbow’s overarching strategy of becoming a sustainable, market-leading, low-cost poultry producer.

“The return of Rainbow to the JSE is a significant and exciting milestone for the business, heralding the next phase of the Rainbow story. Aside from providing existing RCL FOODS shareholders and future investors an improved ability to manage their preferred investment exposure, the unbundling allows Rainbow to be managed in a pure-play, fully standalone environment, and gives Rainbow direct access to equity markets in support of its medium- to long-term growth opportunities. RMB’s role in this transaction is one of a trusted partner and adviser to both RCL FOODS and Rainbow, built on the back of a long-standing relationship with the broader group across advisory, lending, and transactional banking,” says Dipeel Parbhoo, Transactor at RMB.

RMB Corporate Finance acted as sole financial adviser to RCL FOODS on its strategic portfolio review, which was concluded in 2020 and, in 2023, advised RCL FOODS on the divestment of its distribution business, Vector Logistics, as the initial step in implementing the revised strategy.

In respect of the unbundling, several RMB teams across advisory, lending, transactional banking and client groups worked closely to tailor structural and funding solutions for both RCL FOODS and Rainbow to ensure long-term sustainability and success, considering the significant complexity inherent in the separation of Rainbow from RCL FOODS.

“Our ability to deliver bespoke financing packages with a focus on enabling our clients’ strategic growth plans has solidified our role as a trusted advisor to RCL FOODS. We have also made significant progress in developing a new advisory and banking relationship with Rainbow, and we look forward to helping them achieve and extend their ambitions in future,” Dipeel concludes.

ENDS