By Melody Chikono
National Social Security Authority (Nssa) says it is set to acquire controlling equity in Cold Storage Company and will in Q1 2018 start operations after concluding the current engagements.
Nssa’s investment, which will be implemented through a share subscription and shareholders’ agreement, will see Nssa acquire 80% of CSC with government retaining 20% equity.
Nssa is currently undergoing technical partner engagements to identify key areas that need to be corrected before CSC becomes operational.
This comes after Nssa made a commitment to participate in the resuscitation of CSC in Q3 2017 in a deal that will see the injection of US$18 million into the company.
Nssa board chair Robin Vela told businessdigest that the social security authority has begun the due diligence process guided by an investment plan as CSC embarks the turnaround journey.
“Nssa is currently engaging a technical partner to try and find ways into which we can identify changes that need to be made into CSC. We are sure in Q1 2018, we will have completed the engagements and then operations will commence,” Vela said.
Before its closure, CSC was the anchor of the livestock industry, making valuable exports that contributed significantly to the country’s GDP.
Corruption and mismanagement have been blamed for the parastatal’s failure. Vela said Nssa was confident of turning around the company with focus now on making it an exporter.
“CSC used to export to the EU (European Union). We want to revive it to ensure that it starts exporting again. It is, however, too early to comment on production figures given that production has not commenced and also in light of the fact that the technical process is still ongoing. However, the turnaround will make a significant contribution to the livestock sector, canning and other processes that CSC used to do. We wouldn’t put an investment where we know there are no returns,” he said.
CSC is one of the latest additions to Nssa’s massive investment portfolio.
Vela said the acquisitions were investments that will enhance deliverance of value and substance to Nssa.
“A look at our performance will tell you that we are doing well, from profit levels of under a billion (dollars) in 2015 when I joined, we are now at US$1,5 billion. We want to make substantial investments,” he said.
Earlier this year, Nssa also took a controlling equity stake in RTG and reconstituted the board of Rainbow Tourism Group Ltd which increased its shareholding to 56,34%.
It also consolidated its insurance investments with all conditions precedent in relation to First Mutual Holdings’ acquisition of control of NicozDiamond Insurance having been met to date.