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CFI Holdings recapitalises

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Diversified group CFI Holdings Limited, says it is in the process of recapitalising some of its subsidiary companies using funds accessed from the Preferential Trade Area (PTA) Bank and Zimbabwe Economic Trading Revival Facility (Zetref) as part of efforts to boost its operations.

CFI Holdings group chief executive officer Steve Kuipa said the group had already accessed $3,8 million from PTA Bank and $600 000 through Zetref.

He said $1,8 million had been invested in Hubbard Zimbabwe hatchery while $1,4 million had gone to Victoria Foods for the reconditioning of maize and wheat meal plants in Gweru and Harare.

He said $200 000 is expected to be used for automation of packing services that had been done manually.

“Given delays in capital raising, recapitalisation and streamlining initiatives, it is unlikely to see the group returning to profitability in 2011,” said Kuipa.

The group is in the process of disposing its interest in five companies to pay off some of its debts and restructure.

The company intends to dispose its 14% interest in Windmill, 10% in Beira Grain Terminal, 45% in Maitlands Zimbabwe, 70% in Doré & Pitt and Honey Dew farms, land and other properties.

“We expect to reduce our borrowing by $7 million before September 2011. At least $3 million is assured and the rest depends on the progress on negotiations and liquidity on the market,” said Kuipa.

He said the balance of proceeds would be utilised to fund a retrenchment exercise the group would be undertaking in the next financial year, expected to cost $850 000.

Kuipa said at least 45 people would be made redundant through the process of automation.

The group’s subsidiaries Victoria Foods, Agrifoods, Hubbard Zimbabwe, Crest Breeders International, Suncrest Chickens and Glenara Estates recorded a steady increase in capacity utilisation for the half-year ended March 31 2011.

The group recorded a revenue increase of 25% to $47,9 million from $38,2 million attributed to increased support from suppliers and additional borrowings that the group acquired for the period under review.

The group recorded a loss before tax of $662 984 for the half year ended March 31 against a loss before tax of $366 450 for the same period in 2010.

Poultry contributed 46%, retail 33%, specialised units 21% to revenue, compared to last year when the retail division was the major contributor to turnover.

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