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CAIRNS HOLDINGS judicial manager Mr Reggie Saruchera says none of the potential investors who submitted bids to acquire the Reserve Bank’s stake in the company had indicated plans to lay off workers. This contrasts sharply with market reports that South African firm Vasari Holdings, which has been listed as the priority entity to acquire controlling interest in the firm, wanted to retrench the majority of the workers.
Mr Saruchera last Friday dismissed the reports as mere speculation saying none of the bidders that were angling to acquire the RBZ’s 67 percent stake had revealed plans to lay off the bulk of the firm’s 695 workers.
The bidders for the central bank’s Cairns shareholding included local companies Dairibord Holdings and Judah Holdings Limited and South African firms Vasari Global Limited and Eastern Trading Company Limited.
“Out of the four bidders, Vasari was identified as one of the priority bidders and bilateral discussions are underway.
“None of the bidders has suggested that 500 employees will be sent home if they were to successfully invest in the business,” said Mr Saruchera.
He added that out of the staff complement of 659 employees, 495 employees were back at work and capacity utilisation had increased from 5 to 30 percent since the start of the judicial management in November 2013.
“We are thankful to CABS for providing us further funding under the Distressed Industries and Marginalised Areas Fund programme. This will help us increase production and get more of our staff back to work.”
However, sources at the company said the investor wanted a significant number of workers retrenched as the company restructures before fresh capital injection after running into problems due to serious capital and liquidity constraints.
“Many people have been shortlisted for retrenchment. But they are not happy about the package, which they were hurriedly made to accept so that this would be communicated to the investor,” said a source at Cairns.
The source said the investor had indicated that there was a need to downsize the workforce with workers playing an integral part to this initiative by accepting his proposal first before he committed to investing in Cairns.
It is understood that those notified of the retrenchment had been made to quickly decide on whether to take or reject the offer made by Vasari Holdings lest the investor walked away and the firm went into liquidation.
Considering Cairns has nearly US$20 million liabilities it would be highly unlikely that workers would get much from proceeds of the liquidation process as priority would be given to secured creditors and lenders.
Among the terms of the alleged retrenchment package were two weeks salary and one month notice multiplied by the number of years one has been employed by Cairns. However, Mr Saruchera dismissed the claims.
“No stakeholder will be hurried into making any decision and certainly not employees. This is a transparent court process and every member and creditor is allowed to attend and express their views and vote at the respective members and creditors’ meetings chaired by the Master of the High Court.
“We have held two such meetings so far and all resolutions tabled have been passed unanimously,” Mr Saruchera said.
He added that each bidder was required to demonstrate ability to provide funds to pay off creditors and members, provide working capital and capital to replace plant and equipment and get employees back to work.
“No effort will be spared to ensure that the Cairns (Holdings) Group is nursed back to health. We owe this to the various stakeholders and particularly to the courts who have placed their confidence on us,” he said.
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