Aico to offload SeedCo stake

Published: 19 July 2013

ZIMBABWE Stock Exchange-listed agri-industrial firm Aico Africa Ltd is set to dispose of a 20 percent shareholding in Seed Co to a United Kingdom seed company, Limagrain, sources familiar with the matter have said.

The shares will be offloaded in two blocks, beginning with 10 percent stake, a senior Aico official confirmed yesterday.

The money realised from the transactions would be used to finance some of the group's operations. Aico owns 50 percent shareholding in Seed Co, 100 percent in the Cotton Company of Zimbabwe and 49 percent in Olivine Industries.

"Limagrain wanted some presence in Africa and they are coming in as partners ..... they don't need any control," said the Aico official who requested anonymity because the matter "is private and confidential".

"The money realised from the sale of the shareholding would obviously be spent on some operations within the group."

Debt remains the greatest threat to the group and the planned unbundling exercise when it gets off the ground may be Aico's last survival chance, analysts say. Cottco is operationally profitable, but just needs to retire legacy debts while there is a view that Olivine needs the right amount of working capital.

Aico chief executive Mr Pat Devenish said discussions were at a "delicate" stage and could not say much.

Seed Co group chief executive Mr Morgan Nzwere could not be reached for a comment as he was said to be in Malawi.

But about three weeks ago, Seed Co published a cautionary statement advising shareholders that it was involved in a transaction that could have a material impact on the value of the shares.

"Seed Co Limited advises its shareholders that the company is engaged in negotiations which, if concluded successfully, will have a significant impact on its operations and share price. Shareholders are accordingly advised to exercise caution when dealing in the company's securities until further announcement is made," the company said on June 27.

Limagrain UK is the local agricultural seeds operating company of Group Limagrain, the largest plant breeder and seed development company in Europe, according the company's official website. The company breeds and markets agricultural seeds and amenity grass seeds for the UK market under the established brand LG.

Offering the UK's strongest and widest offer of agricultural and amenity seeds, Limagrain has extensive portfolios of varieties and seeds in cereals, oilseeds, beans and peas (including vining peas), sugar beet, seed potatoes, maize, agricultural and amenity grasses and fodder crop seeds. These products are available widely from seed merchants operating throughout the UK and Europe.
- herald