By Chipo Musoko, HARARE, August 30, 2013 (The Source) – AICO Africa Limited’s negotiations with potential investors to recapitalise two of its companies are at an advanced stage, a company official said on Friday.
Group chief executive Patrick Devenish told shareholders that there was need to bring in new investors on board to boost operations of the group, especially ginner Cottco, which has been undercapitalised for the past three and a half years.
“On two of the companies negotiations are at an advanced stage, and due diligence is underway,” he said, adding that one of the transactions would be concluded by December while the other one may be slightly delayed.
Devenish declined to disclose the amount required to capitalise the two units, citing the “very delicate stage of negotiations.” He also declined to say how much would be required.
Due the financial challenges bedeviling the company, cotton output declined by almost half from the anticipated 250000 tonnes to 145 000 tonnes.
“Cottco’s share of the market has substantially declined and as a result it will be declaring a significant loss in March 2014,” he said.
Turning to Olivine Holdings, Devenish said the company continued to struggle due to shortage of working capital and although its losses had declined, the company was far from being profitable.
A partner had been identified for seed company, Seed Co Zimbabwe to access to the much needed capital, expertise and technology according to Devenish.
He said the unbundling of AICO would take place after the completion of the recapitalisation exercise.
In the full year to 31 March 2013, AICO reported an after tax loss of $2 million. Interest expenses remained high at US$25 million in the period under review from US$24 million last year.