adminMartin Kadzere Harare Bureau
ARISTON Holdings Ltd majority shareholders intend to convert loans they extended to the company into equity as part of balance sheet restructuring, sources said last Friday. Origin Global Holdings owns about 68 percent the Zimbabwe Stock Exchange listed horticultural firm and the deal will see the main shareholder increasing its equity in Ariston.
Ariston’s long term borrowings stood at $7,2 million at the end of the full year to March this year, an increase from $3 million in the previous comparable period while short term debt fell from $11,1 million to about $8 million. Finance costs rose from about $1 million to $1,9 million as a result of accrual of interest due to the majority shareholder.
“The plan is to convert the indebtedness of Ariston in respect of money owed and this will effectively reduce the debt,” said the source who requested anonymity. The dilutive impact of the deal could not be ascertained while no official comment could be obtained from Ariston.
In a note to shareholders last Friday, Ariston, which is also into livestock and poultry production, said if the proposed transaction is successfully concluded it “may have a material impact on the company’s share price, capital structure and in turn, shareholding.”
Ariston is engaged in horticulture, tea, macadamia nut production, fishery, poultry production and supply of fresh farm produce. The company is organised into four divisions, which include Southdown Estates, Claremont Estate, Kent Estate, and Fruit and Vegetable Company FAVCO. Southdown Estates is engaged in growing and manufacturing of tea, macadamia nuts, avocados and bananas. Claremont Estate is engaged in producing pome and stone fruit, passion fruit, potatoes and trout fish.
Kent Estate is engaged in the growing of horticultural crops and rearing of poultry and livestock. FAVCO is engaged in the distribution of fresh fruit and vegetables. In full year to March, the group revenues dropped 8 percent to $8 million on the back of a $600,000 decline in revenue at Favco. Operating loss reduced from a $2,7 million loss in 2014 to $800,000.
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