HARARE, August 5 (The Source) – Agro-industrial group CFI Holdings has placed its subsidiaries, Victoria Foods and Crest Poultry Group, under judicial management after accumulating debts deemed to be unsustainable, the company said on Friday.
The two subsidiaries have been struggling since dollarisation with limited working capital which has resulted to negative working capital and net asset position.
Reggie Saruchera of Grant Thornton was appointed as judicial manager of the subsidiaries and their associated companies with effect from August 3.
Putting them under judicial management is expected to stimulate the recapitalisation process.
“The group has placed under judicial management certain entities of the Group, whose level of debt has been considered unsustainable to enable the Group to restructure, reorganise and recapitalise under a framework that ensures all stakeholders are legally protected,” said CFI in an update on Friday.
The group’s bank debt has fallen to $4,8 million, largely as a result of the $16 million debt assumed by Fidelity Life Assurance effective October 17, 2015 in exchange for 81 percent of CFI’s Langford Estate.