admingroup is in the process of offloading its 75 percent shareholding in Scottco and the entire shareholding in loss-making frozen vegetables arm, Exhort.
Aico will then concentrate on its core business of cotton, seed and fast moving consumer goods under Olivine Industries, expected to benefit from the funding.
The group is in the process of disposing of Salamax Trading, described as “a burden” to the group.
Aico has suspended its proposed US$50 million rights issues offer but
the management is optimistic that the group would be able to raise the required funds.
Commenting on the performance for the financial year ended March 2011, Aico said it was in the process of unveiling US$15 million to recapitalise Olivine.
The group’s main constraint has been the lack of adequate working capital, which has led to low production and stagnant sales volumes.
Aico’s proposed rights issue was expected to eradicate debt and necessitate the restructuring of the group’s loans.
The group is valued at above US$100 million on the ZSE and the rights issue was asking for a half of its market capitalisation.
During the period under review the FMCG division registered low margins and high operating costs which resulted in a loss-before-profit of US$4,5 million.
Aico has a volatile earnings stream due to the seasonal variability of dry land cotton production and unpredictable lint prices on world commodity markets.
It turned over US$210 million in the 12 months on account of firmer commodity and sales prices during the period.
But group performance was negated by the FMCG business and discontinued operations, which recorded losses of US$4,5 million and US$1,1 million, respectively.
Group profit from operations of US$33,2 million grew 160 percent over the comparable year with profit before tax going up 311 percent to US$20 million.
The National Social Security Authority owns an 18,8 percent stake in Aico along with other shareholders, Zimre Holdings (17,2 percent) and Waughco Nominees (12,4 percent).
Online Reporter