DELISTED food processing firm Cairns Holding has received the regulatory approval paving way for a South Africa-based investor to inject $30 million to boost output, NewsDay Business has learnt.
By Victoria Mtomba
A source close to the development told NewsDay that Vasari had been waiting for the nod to inject fresh capital into the company following its near-collapse a few years back.
“We wanted shareholders, creditors and regulatory authorities to give us the go ahead and that has been done. We will proceed by scheme of arrangement,” the source said.
The regulatory processes, according to the source, included a proposed plan by the investors to comply with the country’s indigenisation and empowerment regulations compelling foreign-owned firms to sell 51% stake to locals.
Vasari assumed 67% shareholding in Cairns after the Reserve Bank of Zimbabwe disposed its stake in line with a government directive for the apex bank to wind up non-core activities.
The central bank, which at the height of the country’s economic meltdown engaged in quasi-fiscal activities, has, since the introduction of multiple currencies in 2009, ceased its non-core activities. The company’s judicial manager Regis Saruchera last year told NewsDay Business that the company had agreed to settle labour disputes outside the courts which would make it possible for the firm to retain all the staff members. This, he said, was expected to improve the handover-takeover of the firm.
Saruchera said the company was operating at between 35%-40% of installed capacity and had been producing snacks, groceries, biscuits, cornflakes and peanut butter, adding that the winery was also operational.
Cairns applied for judicial management last year after it faced viability constraints that included lack of working capital.
The company also voluntarily delisted from the Zimbabwe Stock Exchange.
In 2012, the company reported a $8,1 million loss for the year to August 2012.
The company is currently saddled with a $11 million debt, with banks being the main creditors.