Interfresh CEO Lishon Chipango sees his group returning to profitability by 2014 once additional structured funding is raised.
In an interview on the sidelines of an Extraordinary General Meeting (EGM) in the capital this week to seek shareholder consent to raise US$3 million through a rights issue, he said his group was seeking to raise additional capital before year-end.
“The additional capital raising should happen in the next couple of months but before the end of the year,” Chipango said.
He said US$3 million his company was raising via a rights issue was not enough to meet the capital needs of the company.
The US$3 million is expected to improve trading capacity and restructure the balance sheet by reducing debt, improve solvency ratios and provide scope for procuring long-term growth strategy.
The rights offer is also expected to enhance Interfresh’s capacity to consolidate the gains of the company’s growth strategy.
“The first five months of 2013 were nothing dramatic as we have been under-capitalised and facing cash flow constraints hence the need to recapitalise. However, yields were good and we expect to at least break even by the end of the financial year,” said Chipango
He said Interfresh would mainly focus on citrus processing which consists of the juicing factory and the bottling plant.
“The company expects an automated bottling plant which will come from China in two to three weeks and will increase our output by about eight to nine times. Moreover, the Juicing factory is going through an upgrade. When all is done, it will cost about US$700 000, which will get us back to the market that we used to supply,” Chipango said.
He said these initiatives would bring the group back to profitability by 2014.
Early this year, the ministry of Lands and Rural Resettlement allocated approximately 1 600 hectares of the Mazoe Citrus Estate to President Robert Mugabe’s wife, Grace.
According to Interfresh’s circular to shareholders, the consequent loss of revenue and assets impairment has left the balance sheet in need of restructuring through an increase in equity funding.
Interfresh said the land listed for compulsory acquisition by the government constituted 46% of Mazoe Citrus’ total arable land, which translated to 30% of budgeted revenue.