Cairns boss resigns

Business Reporter
Chief executive of food and beverages manufacturing concern Cairns Foods Ltd Mr Silas Gweshe has resigned ahead of the completion of the acquisition of a controlling stake in the company by Vasari Global Holdings of South Africa. Vasari is also negotiating for the acquisition of Cairn’s subsidiary Charhons. According to well-placed sources, the soon to be major shareholders have indicated they would want to change the management as part of the broader strategy for the business.
Company secretary Mr Jeremiah Kwenda has been appointed to take charge in a liaison capacity between Cairns management and the judicial management headed by Mr Reggie Saruchera.

Cairns was placed under judicial management towards the end of last year after management voluntarily applied for it in a move meant to resuscitate the once vibrant entity, which has been suffering from massive liquidity challenges.

Although production of some of the group’s lines has resumed, capacity use remains low at around 30 percent.
Prior to judicial management, the company was battling huge operational challenges including an US$11 million debt burden while efforts to raise some US$20 million in new capital largely failed. The group recently received US$1 million funding under the Distressed Industries and Marginalised Fund.

Mr Gweshe has been with the company for the past 14 years, while he was appointed to the post of chief executive in November 2011 replacing Mr Phillip Chigumira who had away earlier in June in a car accident.

He was first appointed as group finance director before being appointed as acting group chief executive following Mr Chigumira’s death.
Following its placement under judicial management, the company announced that it required in excess of US$40 million in fresh capital to retire its debt and to replace obsolete equipment.

It was also reported that it owes suppliers about US$3 million and US$15 million to banks and considerable amounts to the Zimbabwe Revenue Authority and its employees. The judicial manager eventually proposed that the company looks for potential investors and Vasari won the bid to acquire a stake in the company.

Vasari Global Holdings, an international private wealth and multi-asset firm, is expected to take up a 67 percent stake in Cairns and the proposed acquisition follows Cairns stakeholders’ approval of courting potential new investors.

The deal is expected to be completed this month as sources say it now awaits the green light from the Ministry of Youth Development, Indigernisation and Empowerment.