European investor for Olivine industries

European investor for Olivine industries
Published: 03 July 2013
AICO Africa Limited has secured a European investor who will invest $20 million into one of it's subsidiaries Olivine Industries, a source has revealed.

A source said representatives of the new investor were in the country last month to finalise the deal.

"The investor is interested in the company and due diligence is being done. But that is subject to the indigenisation policy and the Zimbabwe Investment Authority approvals," the source said.

"The company has been failing to produce adequate supplies due to shortages of working capital."

Efforts to get a comment from Aico chief executive officer Pat Davenish were unsuccessful.

Olivine products include Buttercup margarine, perfection soap, Jade soap and Olivine cooking oil. The company is also facing difficulties due to the poor yield of soya bean.

Government and Aico each hold 49% in Olivine industries with the remainder being held by the Industrial Development Corporation. Aico has been publishing cautionary statements since last year, indicating that the company was engaged in talks with investors.

In the full year ended March 31, 2013 Aico underperformed due to a 34% decline in seed business profits and losses in both the cotton and fast-moving goods businesses.

The company recorded a 12% fall in volumes to 59 406 due to volume shortfall in Seed Co Zimbabwe.

During the period under review, revenue for the group was 10% lower than last year at $263,9 million due to much softer lint prices compared to last year. The lint prices were 45% lower than the prior year.

Operating costs were 29% higher than last year at $73,4 million while operating profit was 37% lower than last year at $24,2 million.

Profit after tax went down 114% to a loss of $2,1 million during the period under review.
- newsday
Tags: Olivine,

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