adminpositions on which the strategic plan should take precedence between unbundling the group and recapitalising the entity.
Aico owns 100 percent stake in the Cotton Company of Zimbabwe, 50,2 percent in Seed Co and 49 percent in Olivine Industries.
Old Mutual, the second largest shareholder, is pushing for unbundling because it is no longer interested in the cotton business, a move which is being resisted by National Social Security Authority.
NSSA is the largest shareholder in Aico with about 18 percent stake.
The unbundling will see Olivine and Cottco listing on the ZSE as standalone entities.
But for NSSA, the unbundling is not a viable option because it believes Cottco and Olivine need to be recapitalised before the proposed restructuring. Instead, NSSA is pushing for recapitalisation of the two entities before unbundling.
Besides roping in new strategic investors for Cottco and Olivine, NSSA is prepared to inject fresh capital through a rights offer but other major shareholders are reluctant, ostensibly fearing dilution.
In 2011, the group shelved its proposed US$50 million rights issue which was expected to recapitalise its subsidiaries and retire a huge debt.
The management said “we had a strong push back from shareholders” and the capital raising was put on hold.
“It is a very complicated issue because the majority shareholders are differing on strategic issues,” said a source familiar with the developments.
“Old Mutual is pressing for unbundling but other shareholders are opposed to that option.
“Then there is an issue of raising fresh capital from the shareholders. But with tight liquidity prevailing in the market, that option is being resisted, strongly resisted by other shareholders who fear dilution if they fail to exercise their rights.”
Aico chief executive Mr Pat Devenish could not be reached for a comment yesterday.
Aico was formed and subsequently listed on the Zimbabwe Stock Exchange when the shareholders of the Cotton Company of Zimbabwe Limited group exchanged their shareholding in Cottco for a shareholding in Aico.
This merger also involved transferring the assets of Cottco to Aico and Aico replacing Cottco’s listing on the Zimbabwe Stock Exchange on September 1 2008.
The company has been trading under cautionary since December last year.
Online Reporter