adminMartin Kadzere Senior Business Reporter
UNITED Refineries LTD, a Bulawayo-based fast moving consumer goods company, is on a firm recovery following its acquisition by a JSE-listed firm Grindrod Ltd for an undisclosed amount.
Grindrod bought 84 percent shareholding in URL and injected US$2,2 million as working capital. However, Grindrod will have to reduce its equity to comply with indigenisation and empowerment laws “in the short to medium term”, sources have said.
The indigenisation law requires foreign-owned firms to have not more than 49 percent in local companies. “Grindrod made its first proposal to acquire a stake in URL four years ago, but negotiations took longer than expected as the SA firm sought clarity on the indigenisation law,” said one source. URL managing director Mr Busisa Moyo confirmed the transaction with Grindrod but was reluctant to shed more light saying they were “finalising” the transaction and it was premature to make public comments. To confirm the business was back on track, Mr Moyo recently told a local media the company would not close for its traditional annual shutdown.
Grindrod is the holding company of a dynamic organisation listed on the JSE Securities Exchange with more than 100 years’ experience in South Africa’s freight movement and related industries. It specialises in moving dry bulk, bulk liquid commodities, containerised cargo and vehicles by road, rail, sea and air, providing specialised services on route. It is a global business represented in more than 34 countries. Grindrod is also finalising the acquisition of CFI Holdings’ 49 percent stake in Victoria Foods for US$3,2 million. CFI shareholders have already approved the transaction.
Under the transaction, Grindrod will 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.
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