RBZ injects $3.3 million into CAPS Holdings

Harare Bureau
THE Reserve Bank of Zimbabwe (RBZ) has provided $3.3 million towards re-capitalisation of the country’s largest, but mothballed pharmaceuticals manufacturer CAPS Holdings. The funding will enable the pharmaceutical company to resume operations before looking for an investor.

Government has delayed the search for interested investors for CAPS Holdings in order to have ample time to restructure the operations of company to be able to reflect its true value. Industry and Commerce Minister Mike Bimha said a number of investors had shown interest in CAPS Holdings, but the company had been caught up in numerous legal wrangles and heavy indebtedness. He said the Government could not invite investors before addressing the company’s state of affairs.

“There are investors which had been shortlisted for the company but as Government we have decided to run the company first and sanitise its operations so that it reflects its true value first before inviting investors.

“There has been a lot of issues happening at the company and it is critical that we run the company for now up to a point where we are confident of engaging outsiders,” said Minister Bimha.

“The RBZ injected $3.3 million into the operations and we are going to be motoring the company’s operations for now and this out of the fact that we have had situations where some companies were sold for a song,” he said.

At its peak, CAPS Holdings used to manufacture 75 percent of essential drugs in the country and was once listed on the Zimbabwe Stock Exchange.

Government through the Reserve Bank of Zimbabwe managed to settle outstanding debts with banks and other individual creditors.The feud between Government and businessman Fred Mtandah was resolved.

The pharmaceuticals manufacturer shut down operations four years ago due to problems related to under-capitalisation, massive debts and alleged management malfeasance.

Last year, the High Court ordered the sale of CAPS Holdings’ head office through a private treaty after an initial disposal of the property was reversed following a $1.5 million bid by Chinese investors.

CAPS was once one of the largest pharmaceutical companies in Sub-Saharan Africa before it plunged into financial crisis.Units under the group include QV Pharmacies, Caps Pharmaceuticals, Geddes Limited and St Annes Hospital. The company also runs CAPS South Africa and CAPS Botswana.

Reports say Cabinet recommended that Government, through the Industrial Development Corporation, should save the company from collapsing by taking over its debts, but had been unable to bail it out.

Various schemes proposed by shareholders to revive operations have failed to take off.