NETHERLANDS: Wessanen postpones American Beverage Corp sale
Dutch food group Wessanen has put plans to divest its US beverage unit on hold after reporting significant operating losses in the second quarter of 2009.
Last month, the company uncovered financial irregularities within its American Beverage Corp (ABC) business, which showed the unit's results had been misstated over a number of years, going back to 2006.
In its second quarter results today (29 July), Wessanen CEO Frans Koffrie said: "The investigation into reporting irregularities at ABC has nearly been finalised and a forensic investigation has been initiated. We conclude that the equity position at Royal Wessanen at year end 2008 was overstated by approximately EUR15m (US$21m), some EUR5m higher than indicated on 15 June 2009."
Koffrie said the review to divest ABC has been put on hold, while a recovery plan is put in progress to ensure that the business will be profitable again.
He said the company still intends to pursue a divestment of ABC "in due course".
The company posted operating losses of EUR5.4m (US$7.6m) today, which Wessanen blamed on the financial irregularities within ABC.
Wessanen also recorded net losses of EUR84.6m for the quarter, versus EUR6.8m in the restated second quarter of last year. The company put this down to the write off of deferred tax assets of EUR80.6m, in addition to operating losses.
Net sales, however, increased by 4.8% to reach EUR408.5m.
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