Godiva's owner to step up food production

[BRUSSELS] The Turkish owner of Godiva chocolates and McVitie's biscuits is placing on hold a plan to sell some of its assets and will instead increase food production to meet rising demand due to the coronavirus pandemic.

Yildiz Holding suspended efforts to dispose of its frozen-food division Kerevitas Gida Sanayi ve Ticaret and its UK cracker unit Jacob's, according to people with direct knowledge of the Istanbul-based company's plans. It will still exit businesses outside of its core focus of food production, depending on investor interest in the assets, they said.

The world's third-largest biscuit maker is chasing sales growth of more than 10 per cent this year by ramping up output, the people said. Yildiz, which is owned by the family of Turkish billionaire Murat Ulker, is taking advantage of a surge in food demand to repay bank loans after restructuring US$6.5 billion of borrowings in 2018, the biggest-ever debt reorganization by a Turkish company.

Yildiz made an early repayment of US$600 million, using sales generated abroad, bringing to US$2.6 billion the total it has repaid under the deal with Turkish lenders, Yildiz said last week.

While declining to comment on the change in asset strategy, or its outlook, Yildiz said in an email that it had a "strong performance" during the first half "despite extraordinary circumstances caused by the global pandemic." The group expects double-digit growth in 2020 sales from US$8.8 billion a year ago, with exports and international operations accounting for 40 per cent of that.

Kerevitas in December said it hired Morgan Stanley to assess options for the business. Yildiz early last year appointed Oppenheimer Holdings to offload its stake in the Jacob's cracker business and its production facilities in the UK, people familiar with that matter said at the time.

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