Ariston Holdings Limited shareholders yesterday approved a plan to raise $8 million to recapitalise the group at an annual general meeting (AGM) held in Harare.
The funds to be raised through a rights issue will finance capital expenditure projects, retire debt and working capital needs.
At least $1,955 million will be allocated to capital expenditure, $3 million debt retirement and $2, 8 million to working capital.
Speaking at the AGM, the company’s chief executive officer Paul Spear said the recapitalisation would have a significant impact on the business.
The group’s new technical partner, AfriFresh, which recently acquired a 42% stake, would be the underwriters of the rights offer.
AfriFresh chief executive Chris Conradie said he was impressed with Ariston’s assets although they had deteriorated due to lack of investment.
“We have a long-term strategy for this business. I was impressed by the farming assets of Ariston although lack of investment has led to the assets deteriorating.
“Some farms will need more work than others,” Conraide said.
AfriFresh produces 250 products sold in more than 15 countries in the world.
It entered into Ariston after Emvest sold its 42% stake in the company.
Turning to revenue projections, Spear said the company expected a turnover of $22,1 million for the year ending September 30.
He said the company would focus on increasing capacity utilisation, operational efficiency and profitability and cash generation this year.
“Volumes remain below potential, there were high labour costs, capacity utilisation was low and expensive funding for inputs,” he said.
The company’s retail division Favco’s agreement with OK Zimbabwe has been finalised and the upgrading of the delivery fleet is ongoing. Favco supplies farm produce to OK Zimbabwe.
Spear said the retail division had a potential to perform better and the group was looking forward to an improved situation.
The group was expecting improved output from its produce that include potatoes, stone fruit, macadamia and tea this year.
The poultry business margins are expected to be satisfactory.