RADAR Holdings Ltd (Radar) has disposed of its engineering subsidiary Commercial and Industrial Holdings (Pvt) Ltd to a consortium of indigenous businessmen for $5,3 billion.
The divisions within CIH that have been sold in the transaction include the group’s engineering operations, home furnishers and several properties.
“Agreement has been reached for the sale of Commercial and Industrial Holdings to a consortium which includes management,” said company chairman Kenneth Schofield.
An offer of $5,3 billion was made.
Schofield said $4,5 billion had already been paid in cash and the balance would be paid within a calendar year.
The effective date of the sale dates back to July 1 this year and the value of net assets sold is $838 million.
Radar engaged in a process of off loading its engineering divisions to concentrate on core business and create a better-focused and positioned company in this unfavourable economic climate.
Many companies are merging, forming partnerships while others are getting rid of certain divisions as survival strategies in this harsh economic environment.
Inflation has reached a record level of 455,6% and interest rates continue to escalate making it difficult for companies to operate.
The Confederation of Zimbabwe Industries, the nation’s most powerful business grouping, says more than 600 firms have closed shop during the past two years because of the difficult operating environment.
All divisions under Radar have been performing very well with the exception of Border Timbers Ltd and Mcdonald Bricks which had a significant reduction in unit volume caused by inflation.
Border is listed separately on the Zimbabwe Stock Exchange.
Radar earned after tax profit of $594 million for the year ended June 30.
Schofield said proceeds of the sale would be used to finance the group’s capital expenditure programme.