Agricor Limited plans to dispose its non-core asset Premier Milling Company to Croco Holdings Private Limited in a move aimed at retiring its expensive debt and create working capital for the group.
Agricor is a subsidiary of Chemco Holdings. In trading update Chemco Holdings limited company secretary Givemore Mafunga said the deal is valued at slightly over $1 million.
“The disposal comprises the sale and transfer of shares in Premier Milling Company Pvt Ltd to Croco Holdings, who shall take ownership of the company and its assets and liabilities for consideration,” Mafunga said.
He said the assets are the property Premier Milling Company, land, offices, warehouses and buildings specialised for milling.
“The board of the directors is of the view that the disposal is in the best interest of the group and shareholders. The proceeds arising from the disposal will be utilised towards the retirement of expensive bank borrowings and debt and provide essential working capital for the future expansion of existing businesses mainly in the manufacture and sale of agricultural chemicals,” he said.
In June this year the company recorded losses that were mainly from discontinued operations while losses from continued operations were small and manageable.
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The company indicated that it had huge borrowings and would dispose off a core asset at Chemco to stop losses.
TSL delisted Agricor from the ZSE in 2000 and quoted Chemco Holdings in its place through an unbundling process that has failed to deliver both financial results and shareholder value.
Chemco last year closed loss-making divisions, Chemco Transport, Farm-A-Rama and Agpy through a management buyout.