Pioneer Foods took a hit during intraday trade after the company axed a potential material transaction.
Shares in the company traded 4.38% lower at R169.00 at the close.
Pioneer announced, via Sens, that South Africa’s sovereign credit rating downgrade had derailed plans to explore a material transaction, for which it had been approached.
“Shareholders are hereby advised that, 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,” the company said.
Here’s proof, if we needed any, that a downgrade to junk brings investment activity to a grinding halt. pic.twitter.com/OQnd1bBwPI
— Karin Richards (@Richards_Karin) April 21, 2017
It also withdrew the cautionary announcement dated March 7, in which it advised shareholders that the deal may have had an effect on its share price had it gone ahead.