The Public Investment Corporation (PIC) on Monday remained silent as further reports emerged that Daybreak Farms is in deep financial trouble, leading to its CEO, Richard Manzini - who was tasked with turning around the state-owned poultry enterprise - quitting.

Daybreak's financial viability as a going concern is in question with the prices of chicken on supermarket shelves potentially at stake. Daybreak is one of South Africa's largest independent, integrated poultry producers.

The exit comes as the PIC allegedly rejected a request for an additional R250 million loan to aid the financially stressed company, according to a TimesLIVE report over the weekend.

The PIC, the largest asset manager on the continent, oversees assets on behalf of the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF), and the Compensation Commission. It wholly owns Daybreak Farms, which was renamed Daybreak Foods last year.

A source, who declined to be named, told Business Report on Monday that the entire top management team resigned and left the company in February after the PIC loan fell through.

Furthermore, it emerged in December that the company potentially faces liquidation after failing to repay a supplier R42m for its largest contract grower for poultry production, as reported by News24.

The source alleged that Daybreak’s largest customer, Shoprite, also lent the struggling company R100m in December 2024, but Daybreak was unable to repay this loan as of February 2025, this while numerous other parties allegedly threatened to put Daybreak into liquidation last year for non-payment of bills.

Despite a request for comment on Monday on the allegations, the PIC failed to respond, though it is answerable to the organisations it manages funds on behalf of, such as the GEPF, UIF, and Compensation Commission.

Daybreak Farms said it will respond on Wednesday. Shoprite also failed to respond to a Business Report request for comment by the deadline.

Turnaround Fizzles

Last year, it appeared Daybreak was on the path to recovery. It underwent a reorganisation with a new C-suite team appointed following an overhaul of the company’s board in 2022, prompted by reports of multimillion-rand irregularities amid State Capture at the chicken producer. Additionally, four non-executive directors were added to the board to bolster corporate governance. Daybreak produces roughly 1 million birds per week.

Despite the corporate governance overhaul, Daybreak has been in financial distress for some time due to adverse market challenges. Chicken prices slumped to between R26 and R27 per kilogram in June, compounded by Highly Pathogenic Avian Influenza (avian influenza) the year before and rising electricity prices further knocking its bottom line. This comes as the local industry also combats the dumping of poultry. Troubles could lie ahead.

The South African Poultry Association warned last month that South Africa faces an “imminent” bird flu crisis, urging immediate action against avian influenza amid surging outbreaks in the UK and US - where 1.8 million birds were culled in the UK over three months and 23.2 million were killed in the US in December 2024.

The past few years have battered the poultry sector in South Africa, with Daybreak’s larger competitors - including Astral, Rainbow Chicken, Sovereign Food, Country Birds, and Quantum Foods - only starting to recover profits last year.