MUTAPA Investment Fund (MIF), a sovereign wealth vehicle set up by government to revive distressed state enterprises, has injected US$8,5 million into the Cold Storage Company (CSC) and settled most of its local debts, businessdigest has established.
MIF’s milestone follows the April approval of a revival plan crafted by CSC corporate rescue practitioner Crispen Mwete, aimed at resuscitating what was once Africa’s largest integrated meat processor.
Under the plan, MIF will invest a total of US$56,3 million in CSC over the next three years. Of this, US$9,3 million is earmarked for disbursement this year, with the company expected to officially exit receivership this month.
The move comes after government last year terminated a US$130 million joint venture (JV) agreement with British investor Boustead Beef. Authorities accused the firm of failing to meet its investment obligations under the deal, which ultimately collapsed.
In an interview with businessdigest this week, Mwete said MIF was on track to fulfil its financial commitments.
“Mutapa invested US$8,5 million,” he said.
“The balance is yet to come to make it US$9,3 million, which is the amount adopted in the plan.
Most of the creditors have been paid. Repairs have started, but most of it is work in progress. We are still waiting for spares that are imported.”
- Boustead Beef seeks to end CSC corporate rescue
- Boustead Beef seeks to end CSC corporate rescue
- Let the music play at JamAfro Festival
- British investor makes new claim over CSC . . . Boustead says it took over full control of the beef processor in 2019
Keep Reading
Mwete added that CSC was now waiting for approval from the Reserve Bank of Zimbabwe (RBZ) to clear its outstanding foreign debts.
“External debts (remain our biggest hurdle), but as soon as we get cleared by the RBZ, we do the transactions,” he said.
According to the rescue plan, MIF funding will be channelled towards clearing arrears, rehabilitating infrastructure, restocking cattle ranches, and restoring operations.
“Cold Storage Company Limited was placed under corporate rescue in December 2020 after an investor, Boustead Beef (Private) Limited, who had signed the Livestock Joint Farming Concession Agreement with the Government of Zimbabwe, failed to inject the required US$130 million as stipulated in the agreement,” the document states.
“The shareholder, Mutapa Investment Fund, will invest a total of US$56,3 million over the next three years to settle the company’s debts, revitalise the infrastructure, restock cattle ranches and resume viable operations.”
However, the document also notes that CSC’s return to full operations has been hampered by ongoing legal and financial disputes involving Boustead Beef and other parties seeking to recover their investments.
“The corporate rescue proceedings faced numerous legal challenges, mainly from Boustead Beef, who caused the removal of two successive corporate rescue practitioners, thereby stalling and delaying the proceedings.
The main stumbling block to the business rescue of the company was the agreement between Boustead Beef and the Government of Zimbabwe, which the two parties deemed to be extant despite CSC having been placed under corporate rescue due to the failure of the joint venture.”
