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The Competition and Tariff Commission has announced that it assessed and approved the acquisition of 100 percent shareholding of Cut Rag Processors Private Limited by Gold Leaf Holdings Limited in the second half of last year.
Before the acquisition, Cut Rag Processors was 30 percent owned by Zimbabwe Stock Exchange- listed entity TSL Limited where it was accounted for as an associate company.
Cut Rag, which was valued at $2 million in October 2017, had been available for sale since November 2014. Completion of the disposal was delayed since management of Cut Rag had opted for a managed liquidation process which was completed in 2018.
According to the Competition and Tariffs Commission, Cut Rag’s core business is purchasing of packed tobacco from tobacco merchants and processing for re-sale to local and offshore markets in the form of cut rag.
The company also processes cut rag on behalf of customers mainly merchants and other local cigarette manufacturers who do not have in-house cut rag manufacturing facilities.
The acquiring firm Gold Leaf Holdings Limited is a registered investment trust company, which was incorporated in Mauritius in May 2018 and is part of Gold Leaf Holdings Group whose main interest is cigarette manufacturing and distribution to companies in a number of SADC and COMESA regions.
The transaction which was classified as a vertical merger, was approved on condition that, Cut Rug (Pvt) Ltd, its affiliates or successors in title shall continue to supply other cigarette manufacturers with cut rag and cut rag processing services at non-discriminatory terms and conditions of supply that include inter-alia prices, quality and delivery terms.
The successors must also submit to the Commission, on annual basis, information in relation to the quantities of Cut Rag sold and Cut Rag services rendered to cigarette manufacturers including prices and delivery terms.
Bongani Ndlovu