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Bulawayo holds off auctioning CSC property after news of turnaround plan

Zimbabwe’s debt-stricken meat processor, Cold Storage Company (CSC), owes Bulawayo City Council (BCC) $1.5 million as at April 30 this year in outstanding rates, latest council minutes show.

“The Town Clerk reported (26th May, 2017) that (CSC) owed council a total amount of $1 545 283 as at 30th April 2017. Most of these accounts had been handed over to various law firms as follows: T Hara and Partners; R Ndlovu and Company; James, Majwabu Moyo,” reads the minutes in part.

Council said some of the accounts were now at attachment stage but had temporarily been suspended after CSC submitted a turnaround plan which was approved by Cabinet recently.

The plan includes raising funds internally through disposal of idle assets in Harare, Kadoma and Gweru, worth an estimated $4.5 million.

“We therefore recommend that council abandons the long route of trying to attach and auction immovable property of the company,” read the minutes.

CSC is saddled with a debt of over $25 million — from $9 million in 2009 — mainly from fixed costs such as wages, rates and taxes on land

In its plan, CSC proposed a 12 month standstill arrangement on payment of capital due to trade creditors to allow for the company to attain steady production levels, and thereafter, payment in equal installments over a period of between 48 and 54 months.

Similar terms were proposed for its wholly owned subsidiary, Wetblue Industries which has debts amounting to $2.3 million, including $1.8 million in outstanding wages to employees.

The employees will be offered 20 percent of shares in the company, and get $2 000 per employee as full and final settlement of their outstanding wages.

CSC, at one time the largest meat processor in Africa, handled up to 150 000 tonnes of beef and associated by-products a year and exporting beef to the European Union, where it had an annual quota of 9 100 tonnes of beef.

In its heyday, it used to earn Zimbabwe at least $45 million annually.

The CSC is reportedly making an annual loss of $6 million, stretching over the past ten years.

The firm is now operating at less than 10 percent of its capacity, and its employment numbers have fallen from 1 500 in the 1990s to the current 413 employees, who are owed $3.5 million in salary arrears.- The Source

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