Food producer, Kido Group Corporation, has made the strategic decision to completely exit the chilled food and ice-cream business, with an expected gain of VNĐ2.5 trillion (US$95 million).
In a recent resolution, the corporation unveiled plans to divest all capital from its ice cream and chilled food operations.
This move involves transferring over 36 million shares of KIDO Frozen Foods Joint Stock Company (KDF), representing 49 per cent of KDF's charter capital, from KIDO Group to Nutifood Nutrition Food Joint Stock Company (Nutifood) or entities designated by Nutifood.
Trần Kim Thành, chairman of the board of directors and legal representative of KIDO Group Corporation, has been authorised to oversee all necessary tasks to facilitate the transaction, including negotiations, document signings, and compliance with regulatory procedures.
In addition to addressing ownership and brand usage issues surrounding the Merino and Celano ice cream brands, this divestment may also help streamline Kido's operations. The company has proposed deferring dividend distributions for 2024 to support its ongoing restructuring efforts.
While the frozen food and ice cream business had been a significant sector for Kido for many years, contributing significantly to profits, by 2022, a decline in operations had set in. Profits for the ice cream segment continued to decrease in the first half of 2023, with profit margins narrowing to around 45 per cent.
Amid challenging business conditions, Kido has also paused the Vibev joint venture and the Chuk Chuk tea-coffee chain due to underperformance. The company is now focusing on developing the confectionery sector and expanding its retail presence with commercial centres like Vạn Hạnh Mall and Hùng Vương Plaza.
Before the decision to fully divest, Kido had previously transferred a 24.03 per cent stake in Kido Foods to Nutifood in 2023. Subsequent reports suggested that Nutifood had taken control of the business, leading to disputes over brand ownership. — VNS
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