KWEKWE City Council says three companies have expressed interest in injecting capital into its loss-making business entity, Kwekwe Breweries.
BY BLESSED MHLANGA
City treasurer, Rejoice Maweni, identified the companies as Plastic World, Ngoda Breweries and Afriworks Capital.
Council has, for the past few years, been scouting for investors to take over the subsidiary, although some councillors insisted on a forensic audit of the obsolete traditional beer brewer to ascertain its market value.
According to recent minutes of the council’s finance committee, councillors expressed reservations about disposing the brewery before conducting due diligence checks on interested investors.
“While members took note of the developments, they emphasised on the need to carry out due diligence before awarding the tender to ensure that council gets the best investor with the capacity to turn around the entity,” the minutes read in part.
“We want to avoid previous experiences of leasing out entities to struggling investors, such as what happened last time to the guest house and two farms.”
Three years ago, the local authority signed a lease deal with a private company, Limsol Trading, but the deal collapsed after the latter failed to inject the required capital to turn around the beer concern’s fortunes.
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Maweni assured councillors that they would now include a clause in the lease agreement giving council power to revoke the lease in the event of a breach.
“The director of finance said in view of those past experiences, they would ensure that such clauses that would empower council to revoke the leases immediately on breach of terms would be included in the tender documents,” the minutes read.
Mayor, Matenda Madzoke, said his council was still considering other options before making a final decision on Thursday.
“We have a meeting set for Thursday to look into the issue, therefore, let’s give that meeting a chance,” he said.
Council has already lost over $50 000 in labour disputes as former workers at the beer concern demand their dues.
