MIDDLE management and workers at Pioneer Transport have taken over the business after receiving a $2,5 million loan from the parent company Unifreight Africa to help them kickstart the project.
BY TATIRA ZWINOIRA
Speaking at the handover ceremony on Friday, Unifreight Africa Limited chief executive officer Gary Smith said the Pioneer staff were passionate about the company and the services that it offered.
“I am very proud as the CEO of Unifreight Africa Limited to be involved in this transaction and I am full of praise for the way the whole process has been handled by all parties,” Smith said.
Unifreight Africa shareholder and director Hamish Rudland said the company was in financial problems with creditors taking it to courts.
Rudland said due to the challenges that were faced by the company, the group wanted to embark on a retrenchment exercise that would have seen 230 workers losing jobs. However, the employees, through Tawona Svinurai, opted for a buy-out in November 2014 where they formed a negotiating committee responsible for liaising with Unifreight Africa Limited.
An agreement was eventually reached and signed on April 24.
Rudland said Unifreight Africa was still a custodian of the money and the business in terms of assisting the employees to continue to pay off the creditors.
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“There is adequate capital in the business and equipment, but obviously the biggest challenge they are going to have is that it is old,” said Rudland Rudland said the company required $1,5 million as working capital. He cited dollarisation as the beginning of problems for Pioneer Transport that led to it being virtually under-capitalised by 2009.
“Working capital will always be an issue until there is enough profitability for retained earnings. If the employees control the costs, they should be able to get that money to spit out,” said Rudland.
Unifreight made profits in 2011, but thereafter it started to face challenges due to depreciation, repairs and maintenance of the vehicles, but that improved in the second half of 2014.
Unifreight Africa offers comprehensive logistic, freight and passenger transport services to Sub-Saharan Africa.
