RBZ to consider new Cairns offer

Published: 16 December 2013

THE Reserve Bank of Zimbabwe is expected to make a determination on a revised offer by prospective South African investor Vasari Global for its 67 percent stake in Cairns.The revised offer follows failure by the two parties to reach an agreement on the price for the shareholding amid revelations the prospective buyer offered a pittance.

Contacted for comment, judicial manager Mr Reggie Saruchera of Grant Thornton Camelsa expressed ignorance over the issue saying he had not been informed about it.

"That is news to me, I have not been informed about the revised offer," he said.

However, Vasari Global is said to have rejected the central bank's undisclosed price for the controlling stake arguing the price was not justified as the firm was heavily indebted. A meeting was held last week between the prospective investor and the RBZ's assets disposal committee at which Vasari Global revised its purchase offer price.

"At the last final meeting held last week the prospective investor held a meeting with the RBZ assets disposal committee at which the revised offer was made, which the central bank has to officially respond to," said a source close to the developments.

Vasari Global argued that it would not accept the RBZ's quoted price, which the investor believed to be too high for a loss-making firm with a negative capital position. But the RBZ made counter arguments that the price was justified considering Cairns' brand equity and potential to turnaround its fortunes once fully recapitalised.

The company has already returned to profitability after exponentially ramping up production capacity from a record low of 10 percent in 2010 to about 35 percent now.

This follows acquisition of new equipment by the former Zimbabwe Stock Exchange- listed firm after it accessed funding under the Distressed Industries and Marginalised Areas Fund. The funds were used to buy equipment for snacks and canning business.

Other bidders for the RBZ stake included local companies Dairibord Holdings and Judah Holdings Limited and South African firms Vasari Global Limited and Eastern Trading Company Limited, but Mr Saruchera settled for Vasari.

The investment proposal by Vasari follows the approval by the majority of shareholders and creditors of the company in June of the judicial manager's proposal for a scheme of arrangement that would bring in the new investor.

The RBZ was selling its stake in Cairns to raise money to pay off some of its debts. If Vasari succeeds in its quest to acquire the RBZ stake, the firm will have to first obtain indigenisation and economic empowerment approval from Government.

Mr Saruchera recently said that the investor had submitted the indigenisation proposal to Government, which was still considering the plan, amid hope it will be approved.
- herald