State-owned Daybreak restores access to vital IT systems with R2.5m payment

•       Chickenproducer Daybreak Foods has regained access to its email, payroll, directoryand communications systems.

•       ItsIT provider said it suspended services last month after Daybreak failed tohonour the terms of a settlement agreement.

•       Thetwo sides have now hashed out an agreement that includes a R2.5 million paymentand a three-month exit plan for Altron Digital Business.

State-owned chicken producerDaybreak Foods has finally regained access to its IT systems after making adeal with its service provider, Altron Digital Business (ADB).

ADB, a subsidiary of theJSE-listed IT group Altron, suspended the group’s IT services in early June,shortly after Daybreak entered business rescue.

The suspension followed what ADBcalled a persistent non-payment, which breached the terms of an earlier dealthe parties struck to clear Daybreak’s debt.

The suspension meant thatDaybreak could not fully access critical email, payroll, directory andcommunications services.

After weeks of talks, the twosides have now come to an agreement. Tebogo Maoto, Daybreak’s senior businessrescue practitioner, said the group’s IT services have been restored. “Thisamicable settlement with Altron will allow the business rescue proceedings torun smoothly,” he said.

As part of the deal, Daybreakwill make an upfront payment to Altron of R2.5 million for “post-commencementservices” – meaning services provided after the group went into businessrescue. News24 understands that one of the sticking points was Altron’s demandthat payments be made upfront.

The two sides have also agreed onan exit plan – under which Altron will hand over the IT services to a newprovider in three months’ time.

With the group’s IT servicesfixed and an injection of R150 million from the Public

Investment Corporation (PIC) topay salaries, Maoto will be able to fully focus on drawing up his businessrescue plan, which he hopes to present to creditors on 22 August.

The plan makes provision for thesale of part of the chicken producer to private investors, diluting thegovernment’s stake. The state currently owns 100% of the group – unusual forinvestments managed by the PIC.

For years, the verticallyintegrated business— which spans everything from farms to cold storage — hasbeen mired in allegations of mismanagement.

The PIC’s chief investmentofficer, Kabelo Rikhotso, told Parliament’s Standing Committee on PublicAccounts last week that if Daybreak got its house in order, it should be ableto make R400 million a year in profits.

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