ZIMBABWE Stock Exchange-listed manufacturing concern Amalgamated Regional Trading (Art) has disengaged from capital-raising talks with a foreign investor, disrupting plans to shore up one of the group’s subsidiaries later this month, NewsDay has learnt.
Report by Business Reporter
The group last week issued a statement that negotiations which the company had been ongoing over the past few months had been discontinued over unclear reasons. Initially, the group had hinted that Art was on the verge of signing a deal with a new investor.
Recent media reports show that Art was in talks with a South Africa-based investor for a significant stake in the diversified conglomerate’s battery-making unit amid expectations that the deal would be concluded this month.
It is understood that Art had been negotiating with First National Battery (FNB), a subsidiary of Johannesburg Securities Exchange-listed Metair, since the last quarter of last year.
The capital injection was expected to result in FNB acquiring a 60% shareholding in Art Corporation’s subsidiaries, Chloride and Battery Express.
According to an Art statement issued on Friday: “The board of directors of Art Holdings Limited advises all shareholders that negotiations which have been subject of cautionary statements in recent months have been discontinued.”
The group, however, indicated in the half year financial statement ended March 31 2013, that the negotiations were likely to be concluded in the third quarter of the financial year.
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Capital raised from the investment, according to company officials, would be critical in improving efficiency and profitability of the group.
Art Corporation, once a key industrial giant, seems to be facing challenges as the manufacturing industry is underperforming due to economic challenges in the country.
Art was one of the largest industrial companies in Zimbabwe involved in paper manufacturing, paper converting and distribution, pen manufacturing and lead-acid battery manufacturing and distribution with distribution operations in Malawi, Zambia, Zimbabwe and South Africa.
It closed its Mutare Board and Paper Mill subsidiary two years ago after it became costly to operate due to antiquated machinery as well as huge electricity costs.
