CFI in $18mln land sale to clear debt

CFI in $18mln land sale to clear debt

HARARE, September 16 (The Source) – Agro-industrial group, CFI Holdings, on Wednesday said it had reached an agreement to sell most of its Langford Estates in Harare South for $18 million, which will go towards paying off its debt to local banks.

The group owes FBC Bank, Agribank, CBZ, the Infrastructure Development Bank of Zimbabwe, NMB and Standard Chartered a combined $18 million.

CFI is the holding company of several agro-industrial concerns including Agrifoods, Crest Breeders, Victoria Foods as well as retail chain Farm and City Centre. It also has interests in real estate and retail in consumer goods and hardware.

It said deal was a “sale and purchase agreement as well as a debt assumption and compromise agreement to dispose of 81 percent of Langford Estates (Private) Limited, a property investment company, for a total consideration of $18 million through a debt for land swap arrangement.”

Langford Estates’ sole asset is 834 hectares of undeveloped urban land located in Harare South.

“The pricing of the transaction was based on an independent professional property valuation,” said CFI’s Panganayi Hare in an announcement to the Zimbabwe Stock Exchange.

“If concluded successfully, the transaction will result in CFI settling all its interest-bearing debt owed to local financial institutions, with the only remaining interest-bearing debt being a long-term facility of $2,3 million owed to PTA Bank.”

Shareholders of the group will consider the transaction at a general meeting at a date yet to be determined.

It was not immediately clear if the sold land was the same the company had earmarked to develop 12,400 high density residential stands. Harare City Council last November granted the company permission to subdivide Langford and to develop the housing stands.

Hare said the board was also in talks with potential investors and the company’s major shareholders to raise fresh capital.

CFI has struggled in recent times, reporting a $3,8 million loss in the half-year to March from $5,5 million in the prior period. Its last full year financials to September last year showed an $8,8 million loss with key divisions underperforming due to lack of working capital.