ZIMBABWE – Zimbabwe’s state-owned pension fund, the National Social Security Authority (NSSA) intends to acquire about 35 percent shareholding in Silo Foods Industries, a government owned agro-processing company.
According to a latest report on the update of privatisation of state enterprises by the Treasury, Silo Foods is currently undertaking a due diligence exercise and Ernst & Young was appointed transactional advisors, reports The Herald.
The Treasury said Global Genesis has since completed the valuation report of Silo Foods and prepared the negotiation strategy document for the technical team to assist in the negotiations with NSSA.
After its demerger from GMB, Silo Foods inherited US$70 million in core manufacturing assets including Belmont Depot, Cleveland Depot, Mutare deport and Norton Stock Feeds processing plant as well as working capital support in the form of raw materials form the Government.
The unbundling of GMB falls under Government’s plans to restructure State-owned enterprises, within which 41 entities are lined-up for privatisation, departmentalisation or listing on the Zimbabwe Stock Exchange.
Current Silo products that are on the market include: Silo mealie meal, beans, rice, coffee, salt, and samp as well as stockfeeds
Meanwhile the government has been terminated the much-awaited US$130million Joint Venture between the state-owned meat processor, Cold Storage Company (CSC) and United Kingdom firm, Boustead Beef (Pvt) Limited following raised concerns by the investor.
Zimbabwe’s cabinet had approved the deal in March last year that was going to recapitalise and revive the defunct state-owned meat processor through a Concession Agreement under Rehabilitate, Operate and Transfer (ROT) terms.
The initial agreement had indicated that the investment was to be used to finance capital expenditures and working capital for the business and facilitate settling of CSC’s financial debts of about US$42 million and pay rentals of US$100 000 per annum during the first five years of the concession agreement.
Under the agreement, Boustead was to take over and manage CSC ranches in Maphaneni, Dubane, Umguza, Chivumbuni, Mushandike, Willsgrove and Darwendale for an initial period of 25 years.
In addition, Boustead was also to take over and run CSC abattoirs in Bulawayo, Chinhoyi, Masvingo, Marondera and Kadoma and manage its distribution centres and residential properties in Harare, Gweru and Mutare for an initial period of 25 years.
However, the deal has fallen through after Boustead expressed reservations about it following its due diligence.
It emerged that CSCs’ level of indebtedness had been grossly understated and that it had lost the majority of its assets while most of the facilities had become so derelict, they would be too costly to bring back to life.