BLUE Ribbon Industries (BRI) creditors on Wednesday approved the takeover of the company by a Tanzanian industrial conglomerate, Bakhresa Group, a move that would revive the food processor.
BRI judicial manager Reggie Saruchera said bureaucracy resulted in Bakhresa taking over the company this year although there were local investors who were interested, but lacked capacity.
“We waited for three and half years and we were looking for serious investors because BRI required real money for it to take off. At least $10 million is required for raw materials only,”Saruchera said.
He said for the indigenisation plan to be approved, it took almost two years after Bakhresa applied in May 2013 and was approved in May 2015.
BRI had closed shop in 2012 due to funding constraints and was placed under judicial management to revive its operations.
Bakhresa Group would bring in $18,3 million upfront and $40 million would be injected over five years.
“The $12 million will be paid to creditors and $6 million will be for working capital,” Saruchera said after the scheme meeting.
The scheme of arrangement will be sanctioned on September 16 and implementation of scheme and completion of the handover takeover of BRI will be done by next month together with the removal of the company from judicial management.
Bakhresa will take over BRI and its subsidiaries and has the capacity to recapitalise and revive the company, Saruchera said.
“Bakhresa has proposed a once-off payment to creditors on taking over BRI and its subsidiaries,” Saruchera said.
Currently, BRI is operating at 60% to 70% capacity on maize meal and 10% to 15% on flour.
Saruchera told NewsDay last month that the injection by the Bakhresa Group would see maize meal capacity rising to 100%, while flour would peak to 80%.
The food processing company would also engage contract farmers in wheat and maize production.
Saruchera said the Tanzanian group would wholly own BRI. It would then give workers 10% and further sell to locals until the 51%-49% threshold was met in compliance with the empowerment legislation.
The Indigenisation Act stipulates that at least 51% of all foreign-owned companies operating in Zimbabwe should be in the hands of locals.
Bakhresa has operations in Kenya, Rwanda, Burundi, Malawi, Mozambique and South Africa and has created over 10 000 jobs.
The group has grain milling capacity of 5 000 tonnes per day and the capacity will increase to 6 000 tonnes per day by the end of 2015.
Before its closure, BRI was one of the best performing companies with its Chibataura and Ngwerewere mealie-meal brands.
BRI divisions include BRI Logistics, Blue Ribbon Foods, JA Mitchells and Nutresco Foods. Source: News Day