adminThe conglomerate is also talking to other strategic partners about investing in its retail arm Farm & City and Victoria Foods.
Group chairman Mr Simplisius Chihambakwe said once they have concluded the negotiations the firm would embark on a fund-raising initiative through a combination of debt and equity.
“The board is still committed to undertaking a capital raising transaction combining an appropriate mix of equity and appropriately priced medium to long-term debt,” said Mr Chihambakwe in a report to shareholders for the interim period to March 31, 2012.
CFI requires above US$20 million to recapitalise its operations. The company has been financing operations and new projects through the disposal of non-core assets and loans secured primarily from PTA Bank.
To date, CFI has raised about US$4,3 million from the sale of non-core assets. It boasts a huge asset base compared to other listed companies.
The group is also disposing of its Beira Grain Terminal and its 14 percent stake in Windmill.
During the period under review, the company had a difficult trading period as recapitalisation issues were continuously being delayed.
For the six months to March, the company generated US$55,4 million compared to US$48 million recorded during the same period last year, showing a 16 percent positive variance.
Mr Chihambakwe said turnover was boosted by increased demand for hardware and agro-inputs in the retail division.
Group financing costs for the period under review increased to US$1,5 million from US$1,1 million last year.
The group ended the period with a loss of US$1,2 million due to depressed margins that restricted its capacity to turn around it fortunes.
During the period under review, the group accessed an additional US$2,1 million loan as draw-downs under the PTA long-term loan amounting to US$3,8 million.
Part of the money would be drawn down by the end of this month to fund the implementation of various projects.
Volumes in the poultry division rose by 18 percent to 37 106 tonnes, an increase from 31 543 tonnes for the previous year. Demand for poultry feeds also remained high.
During the period under review the group completed the installation of chillers and hatchers which was funded through the PTA Bank loan.
This resulted in an improvement in hatching efficiencies. The group’s specialised division registered a decline in volumes and contribution to turnover.
Online Reporter