LONDON, April 21 (Reuters) - South Africa’s Pioneer Food Group on Friday said a large potential deal it was exploring had fallen apart because of ratings downgrades of the country’s sovereign debt.
Pioneer shares fell 4.6 percent to 16,870 rand on the news, which shows how the nation’s financial turmoil can hurt the growth of its companies.
Pioneer, which sells Ceres juice and Sasko bread, said on March 7 it had been approached to explore a “material transaction” that could effect the food group’s share price. It did not identify the party involved.
Pioneer said on Friday talks had ended. “Due to the recent sovereign debt rating downgrades in South Africa and the potential for additional downgrades, the parties have decided to discontinue negotiations at this time,” it said.
S&P Global Ratings downgraded South Africa’s credit rating to junk this month, saying the firing of its internationally respected finance minister posed a risk.
Reporting by Martinne Geller; Editing by Edmund Blair