Published: 28 November 2013

AICO Africa Limited has written down $30,2 million from the value of two of its units to reflect the decrease in their carrying amounts after a poor financial performance in the interim period to 30 September 2013.

The reduction in the value of subsidiaries Cotton Company of Zimbabwe and Olivine Industries by $24,6 million and $5,6 million, respectively, also reflects the funding crisis that has hit the two companies.

Cottco is borrowed to the tune of $80 million and has been unable to service its debts. Refinancing the debt at intervals and hemorrhage from finance costs has affected its capacity to optimally carry its business.

On the other hand, Olivine Industries also faces serious working capital and capital funding deficiencies and requires about $25 million fresh funding to retool in order improve its production efficiencies.

Cottco plunged to a $16,2 million loss before tax while Olivine recorded $1,3 million loss before tax, seed business $13,7 million as the three units combined to consign AICO to a $29 million loss.

"Following the poor performance The Cotton Company of Zimbabwe and Olivine Holdings, after the balance sheet date, the directors of the company have impaired the investments in these units," AICO said in a statement.

AICO said Cottco's operations have been negatively affected by lower seed cotton intake volumes, whereas lack of adequate working capital continues to hamper performance and recovery in Olivine Holdings Limited.
- bh24

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