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NewsDay

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IDC moves to retire debt

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THE Industrial Development Corporation of Zimbabwe intends to use funds from the disposal of its 49% shareholding in Zimbabwe Grain Bag to restructure its debt and as seed capital to fund new projects.

THE Industrial Development Corporation of Zimbabwe (IDC) intends to use funds from the disposal of its 49% shareholding in Zimbabwe Grain Bag (ZGB) to restructure its debt and as seed capital to fund new projects.

Report by Tarisai Mandizha

ZGB is a partnership between Treger Holdings and IDC set up in 1986.

IDC group public relations advisor, Derek Sibanda on Monday told NewsDay that the disposal of the stake in ZGB was expected to raise $1,6 million. He said with valuations having been completed, IDC had begun courting investors to take up the stake. The company has been valued at $4 million.

“We are in discussions with three potential investors who are currently doing due diligence,” Sibanda said.

“Zimbabwe Grain Bag has a running plant and as IDC we felt we can use this amount to restructure our debt and also as seed capital for new projects.”

Initially the IDC wanted to dispose 35% shareholding in Sino- Zimbabwe Cement Company (SZCC) to clear the Export- Import Bank of China debt, but the plans were blocked by Cabinet due to existing bilateral agreement between Zimbabwe and China.

Though it could not be immediately confirmed how much IDC owed, the 2007 debt emanates from the acquisition of various agricultural implements by government.

ZGB produces polypropylene packaging bags for fertiliser, grain, mealie-meal, sugar and bulk bags for mining companies for both local and export markets.

Sibanda said much of its product demand of late had been from bulk bags for sugar and mineral exports as well as grain reserves in the region. Major customers for the company include Hippo Valley and Triangle Sugar Estates, Food Reserve Agency of Zambia, Bikita Minerals, Hwange Colliery, seed houses, grain millers.

Sibanda said on average, the company had recorded a turnover of $4,7 million per annum since the adoption of multi-currencies in 2009 and prospects were bright particularly as the mining and agriculture sectors were expected to improve.

According to the 2013 restructuring action plan for The State Enterprises Restructuring Agency, IDC was given between November last year to June this year to review shareholder agreements and also conduct the evaluation exercise.

The disposal of the ZGB shares is expected to allow IDC to venture into other projects and recapitalise the existing ones.