admin“As a result of the transaction, CFI’s shareholding in Victoria Foods will be diluted to 51 percent,” said CFI in a notice to shareholders. The extraordinary general meeting would be held on July 26.
Under the transaction, Grindrod, a Johannesburg Stock Exchange-listed company, would also provide Victoria Foods with a US$2,7 million shareholder loan at an annual interest rate of 8 percent. The loan has no fixed tenure and interest may be varied but subject to the limit set by the Reserve Bank of Zimbabwe.
Grindrod will also sign various commercial contracts that would result in Victoria Foods accessing a US$12 million 90-day CMA grain procurement facility.
The proceeds of the proposed transaction would be channelled towards debt restructuring, repayment of creditors and working capital requirements.
CFI will restructure the US$2,8 million of its intergroup loan receivable that incorporates short- and long-term debt owed to it by Victoria Foods, into a shareholder loan.
“The injection of long-term capital into Victoria Foods and the restructuring of debt is projected to have an immediate positive impact on its financial performance, with the enhanced working capital position positively impacting inventory levels and revenue generation,” said the CFI group.
Grindrod Trading is a subsidiary of Grindrod Limited, a JSE-listed South African-based holding company involved in the movement of cargo by road, rail, sea and air. Grindrod Limited operates four divisions – shipping, trading, financial Services and Freight Services. The Trading division trades in agricultural products, industrial raw materials and marine fuels and lubricants.
Victoria Foods manufactures baking flour, maize meal, snake foods and packs a wide range of fast-moving consumer goods.
CFI said the refurbishment of infrastructure and introduction of technical skills at Crest Poultry Group, one of its divisions would allow for better bird performance and ultimately lower costs and improved throughput.
Online Reporter