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- Bega Group (BGA) sells its iconic Port Melbourne factory for $114.6 million to Australian property group, Charter Hall
- The company will still manufacture Vegemite and Bega Peanut Butter at the site, leasing the property for 15 years
- The transaction will strengthen Bega’s balance sheet after announcing its normalised EBITDA guidance for the 2023 financial year was at the lower end of its targets
- Bega will focus on accelerating the final phase of its synergy realisation association, acquiring Lion Dairy and Drinks in a business restructure
- Shares were trading down 0.73 per cent to $3.40 at 3:35pm AEST
Bega Group (BGA) has sold its Port Melbourne factory for $114.6 million to Australian property group, Charter Hall.
The company will still manufacture its iconic Vegemite and Bega Peanut Butter at the site, leasing the property for 15 years, with two additional five year options.
Bega’s decision to sell the site was due to rising production costs and to reduce the company’s debt.
The transaction will see a significant cash inflow, strengthening Bega’s balance sheet after announcing its normalised EBITDA guidance for the 2023 financial year was at the lower end of its $160 to $190 million target range.
In executing the transaction, Bega will focus on accelerating the final phase of its synergy realisation association by acquiring Lion Dairy and Drinks as part of a business restructure.
The overall restructuring, including the sale of the Port Melbourne facility, is set to save Bega approximately $21 million.
The company also reported “extremely robust” competition for farm gate milk supply for FY24, noting a “significant disconnect” between the cost of farm gate supply in Australia and international diary commodity market prices.
BGA was trading down 0.73 per cent to $3.40 at 3:35pm AEST.
