HARARE, September 21 (The Source) – The National Social Security Authority’s (NSSA) $18 million deal to recapitalize Cold Storage Commission (CSC) will go ahead after the High Court approved a scheme of arrangement between the meat processor and its creditors, an official has said.
The state run pension fund expressed interest to bail out CSC in an equity investment arrangement earlier this year but the deal was held up by a creditor opposing the scheme of arrangement.
CSC has debts amounting to $25 million mainly from fixed costs such as wages, rates and taxes on land.
Agriculture Deputy Paddy Zhanda told a beef industry meeting on Thursday that the High Court nod would pave way for the turnaround of the ailing state run enterprise.
CSC, at one time the largest meat processor in Africa, collapsed in 2001 when Zimbabwean beef exports to the European Union (EU) and other countries were suspended following persistent outbreaks of Foot and Mouth Disease. The southern African nation has shortage of vaccines, leading to recurring outbreaks of the disease.
“Exports cannot be resumed under the current circumstances but we have a new method of containing (the disease)….as soon as we open CSC which is anytime from now. I am happy to say the scheme of arrangement was approved yesterday by the High Court and therefore nothing will stop us.”
The CSC is reportedly making an annual loss of $6 million and is operating at less than 10 percent of its capacity.