IDC drops Grain Bag

IDC drops Grain Bag
Published: 14 September 2018
The Industrial Development Corporation of Zimbabwe (IDC) will seek shareholder approval to dispose of its entire equity stake in its subsidiary, Zimbabwe Grain Bag (ZGB).

IDC is currently undertaking a restructuring exercise that will see the group ridding itself of ailing entities, privatisation and liquidation but says prevailing liquidity constraints are hampering the restructuring exercise, the company said.

The company, which has been on the market for the last seven years, is still keen on seeking an investor to snap up its 49% equity stake in ZGB, an exercise which has been ongoing since 2012.

While the IDC is disposing of its medium sized and mature investments, Allied Insurance, Zimbabwe Grain Bag, Stone Holdings and Ginhole Investments, it will also retain and develop certain investments it holds minority shareholding in such as Sino-Zimbabwe Cement Company and Surface Investments.

ZGB and G & W Minerals are some of the subsidiaries under the IDC investment portfolio earmarked for privatisation. Its National Glass Industries has been singled out for liquidation.

ZGB, a Bulawayo-based firm, is a joint venture between the Treger Group of Companies and the IDC with a mandate to satisfy the country's annual demand for grain bags, which previously were wholly imported.

IDC spokesperson Derik Sibanda told businessdigest that the corporation was in discussion with potential investors that have expressed interest with some currently conducting due diligence on ZGB.

"The IDCZ is currently on the market seeking an investor to take up its 49% shareholding in Zimbabwe Grain Bag. In this regard, we are in discussion with potential investors that have expressed interest and some are currently conducting due diligence on the company. At the end of the day we expect to offload our entire stake in Zimbabwe Grain Bag subject to final Board and shareholder approval," he said.

Sibanda added that the IDC had received expressions of interests from both local and foreign investors. While the corporation is saddled with non-performing entities, Sibanda said the whole restructuring process was being hampered by the prevailing liquidity situation.

"Some investors are looking at paying below the market value of the investments and yet others fail to produce the proof of funds after we have reached an agreement with them. As a result, the process has been protracted as, in some cases, we have had to re-advertise as the potential investor(s) originally identified failed to pay or inject the agreed funds as new equity into the investment. Whilst some have the appetite, they might not have the liquidity. Now that the elections are over, we are confident that more serious investors will come forward," he said.

He added that initiatives were in place to identify investors to partner the IDC in some of its investments, disposal of some of the entities, and seek dissolution of those that cannot be turned around.
- the independent
Tags: IDC,

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