Olam eyes substantial stake in Aico

latter, it has emerged.
Informed sources from both companies said although the deal was still in its infancy, there was a mutual understanding for the transaction.
If an agreement is reached, Olam is set to acquire a significant stake in Aico, the Zimbabwe Stock Exchange holding with interests in cotton growing and ginning, seed production, FMCG and horticulture.
Initially, Aico directors intended to raise US$50 million a through rights offer but this was rejected by shareholders. The group was also hoping to recapitalise the business with proceeds from the sale of its subsidiaries.
In addition to the US$50 million, a further US$8 million was expected to come from the sale of subsidiaries Exhort and Scottco.
“Negotiations are already in progress, although they are still at the infancy level. But there is a mutual understanding between the two parties,” said a senior Aico official who asked not to be named. Aico recently issued a cautionary statement to shareholders, warning them to be cautious when dealing with Aico shares.
Aico Africa Limited, incorporated in Zimbabwe in July 2008, was formed and subsequently listed on the ZSE when the shareholders of Cotton Company of Zimbabwe Limited group exchanged their shareholding in Cottco for a shareholding in Aico.
This merger also involved transferring the assets of Cottco to Aico and Aico replacing Cottco’s listing on the ZSE. No official comment could be obtained from Aico and Olam at the time of going to print.