Tanzanian firm to invest in BRI

Published: 21 January 2014

A TANZANIAN firm, Bakhresa Group, is set to inject between $25 million and $40 million into grain milling and food processing entity, Blue Ribbon Industries, to revive the once vibrant company.

Blue Ribbon Industries used to employ about 400 workers before it faced problems and was forced to close shop due to working capital challenges coupled with pressure from a $2 million debt obtained from the Preferential Trade Area Bank.

The company - one of the country's largest millers - was placed under judicial management by the High Court to facilitate revival efforts.

Grant Thornton Camelsa judicial manager Mr Bulisa Mbano said once the relevant due process and regulatory approvals have been completed, Bakhresa Group would bail out the struggling firm, the first step in the planned recapitalisation drive.

"Currently the business is mothballed and once all relevant processes have been completed, an amount ranging between $25 and $40 million will be injected into the company," said Mr Mbano.

Mr Mbano said he could not give further details on the deal as the process was still ongoing.

According to sources, interested foreign investors had been seen touring BRI's Bulawayo and Harare plants to assess the condition of the premises.

"Tanzanian and Chinese investors were here (Harare plant) assessing the situation on the ground. The investors were impressed with what they saw and we hope something good might come out of the tours," said the source.

BRI has a net liability position of nearly $5 million following heavy losses recorded over the past four years. Its average break-even capacity utilisation is around 48 percent, but the currently utilised is around 11 percent.

The group recorded a $6,5 million loss in 2012.

BRI is known for its popular mealie-meal brands Ngwerewere and Chibataura.

The company has five divisions which include BRI Logistics, Blue Ribbon Foods, JA Mitchells and Nutresco Foods.

The group is among a number of companies that have been placed under liquidation or judicial management.

Judicial management seeks to rehabilitate financially troubled but viable companies in a bid to avert liquidation or winding up of the company.

If a company is placed under judicial management it enjoys a moratorium on debt payment while the judicial manager works on revival initiatives.
- herald