2 March 2014

Zimbabwe: Investors Set Eyes On Victoria Foods

FOUR potential investors have shown an interest in snapping CFI Holdings' 49% stake in milling unit, Victoria Foods, barely a week after the proposed sale to a South African suitor fell through.

Last week, CFI announced that it was reversing its decision to sell the shareholding to JSE listed logistics concern, Grindrod Trading.

However, the South African firm is interested in doing business with Victoria Foods and a meeting is scheduled for this week on how it would continue supplying the miller with raw materials.

The proposed equity sale to Grindrod would have generated US$3,2 million to recapitalise the country's second largest milling concern.

Standardbusiness heard last week that at least four potential investors had contacted CFI and wanted the group to prepare information packs so that suitors could commence due diligence exercises.

Two prospective investors are from southern and Central Africa and one apiece from Asia and Europe, Chester Mutevhe, CFI Holding group treasurer said on Friday.

"After the notice [announcing the disengagement by Grindrod] we got calls from investors who are keen to take up equity," Mutevhe said.

He said Grindrod opted to move out of the equity arrangement but was keen to participate in a US$12 million revolving working capital facility in which it would supply grain to Victoria Foods to be paid within 90 days.

The facility had been put in place in anticipation of the conclusion of the equity transaction.

"That arrangement [revolving working capital facility] can address the working capital requirements of the company," Mutevhe said.

"Already, Grindrod are supplying but not at full quantum of the facility. When we meet next week, we will be able to tell how best we can ramp up production."

CFI has already secured regulatory approval for the facility to take place.

Victoria Foods is the second largest miller after National Foods. It operates two wheat plants in Harare and Gweru and one maize meal plant in Gweru.

Copyright © 2014 Zimbabwe Standard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.