By Kuda Chideme, HARARE, September 2 (The Source) – Creditors of Blue Ribbon Industries Limited (BRI) on Wednesday voted in favour of a High Court sanctioned scheme of arrangement paving way for Tanzanian-based Bakhresa Group to inject $30 million and take over the ailing company.
BRI is the holding company of BRI Logistics, Blue Ribbon Foods, JA Mitchells and Nutresco Foods. It was a dominant player in Zimbabwe’s grain milling and food processing industry until it collapsed in 2012 due to funding constraints underpinned by a $2 million debt to the PTA Bank.
The group has been under judicial management sanctioned by the court to help revive its operations. It resumed operations in June last year after securing a supply agreement for raw materials.
The creditors, owed $29, 4 million voted in favour of the arrangement which will see them walk away with $12 million. Liquidating the company — the only other option on the table — would have seen them receive far less.
“Bakhresa will acquire the entire shareholding of BRI, at a purchase price of US$1, thus giving Bhakresa control and full ownership of BRI, BRF, Nutresco and JA Mitchell,” the scheme document reads.
“Concurrently to this, Bhakresa will advance to the Judicial Manager and amount of $12,011,111 to enable the Judicial Manger to settle with creditors”.
A further $6 million will be channelled towards refurbishment of plant and equipment and provide immediate working capital with capital expenditure estimated at $40 million within a period of 5 years.
Bakhresa is a solid food and manufacturing group with operations Tanzania Zanzibar, Kenya as well as in Uganda, Malawi, Zambia, Mozambique, Burundi, Rwanda and recently entered the South African market.