adminBusiness Reporter
CFI Holdings is confident that it would be able to complete its land-debt swap within the next three months in an effort to whittle down the cost of borrowings.
A Memorandum of Understanding has already been signed with banks for the swap of debt for land.
CFI owes financial institutions a total of $16,3 million.
Chairman Mr Simplisius Chihambakwe said the land-debt swap would positively impact on the recapitalization of the group.
“The group hopes to conclude the swap arrangements in the third quarter, thus rationalizing its gearing to levels commensurate with streamlined operations of the group.”
Mr Chihambakwe also added that the group owned 834 hectares held by its subsidiary Crest Breeders, which was scoped into the Greater Harare municipal boundaries in July 2012.
This was followed by an independent valuation of the land bank in pursuance of debt securitisation and debt swap. The land was valued at $40 million
CFI’s short-term debt stood at $15 million in March this year and long term borrowings were $1,1 million while a total of $1,6 million interest was paid out.
Mr Chihambakwe said that the agro-focused group was in the process of adding value to the residual land bank through undertaking residential development projects.
In terms of financial performance, CFI registered a 13 percent decrease in turnover to $41,8 million with poultry division contribution to turnover at 32 percent, specialized division 6 percent and the retail division 62 percent.
The group posted a $1,76 million loss for the interim period weighed down by rationalization costs, working capital constraints, low capacity utilization and cost of finance.
Volumes declined by 39 percent at Agrifoods compared to the prior period, weighed down by intermittent availability of maize and soya and funding constraints.
At Agrimix volumes slumped by 43 percent while performance at Hubbard Zimbabwe was subdued due to falling demand for day old chicks and the effect of power outages.
Crest Breeders International operations were rationalized and would be affected by the land-debt swap and arrangements will be made to relocate the business.
CFI said the Suncrest abattoir remains on care and maintenance and had to rely on toll slaughters to maintain market presence.
Efforts are underway to resolve production bottle-necks for sustainability and viability.
The collapse of the equity transaction affected the production planning process at Victoria Foods, but due diligences by other investors are advanced.
There was little progress at Maitlands Zimbabwe due to continued unavailability of long-term funds for projects.
Turnover grew 16 percent at Farm and City spurred by increased demand for agro-inputs.
The division continued to invest in upgrading its point of sale system to improve availability of accurate, real time and information and to enhance the unit’s internal controls.
Online Reporter