Tanzania’s Said Salim Bakhresa & Company (SSB) will invest US$40mn in Zimbabwe’s Blue Ribbon Industry (BRI) over the next five years
BRI was placed under provisional judicial management of Grant Thornton in September 2012. Under the arrangement for SSB’s investment which has been approved by Zimbabwean authorities, SSB will acquire the entire shareholding and full ownership of BRI by paying US$1.
BRI’s liabilities were pegged at US$29.4mn, and the Tanzanian conglomerate will pay a total of US$12mn to various creditors. Details of the repayments to each of the creditors have also been specified in the arrangement, and approved by the creditors. Another US$6mn will be invested in capital expenditure and working capital. SSB will also cover 62 per cent of employee costs and 80 per cent of statutory obligations.
Reggie Saruchera of Grant Thornton told a creditors meeting that the initial investment of US$18mn by SSB will allow BRI to operate at full capacity by the end of 2015. “BRI requires real money for it to take off. It needs farmers who supply the grains. At least US$10 million is required for raw materials only.”
Saruchera said the handover to the new investor would be done in the next month or two after sorting out conditions surrounding the grain supply agreement which was signed between BRI and Mega Market in June 2013, and implemented in June 2014.
The injection of fresh capital into BRI is also expected to resuscitate its three wholly owned subsidiaries namely, Blue Ribbons Foods (BRF), Nutresco Foods and JA Mitchell.
BRI is the second largest food and milling company in Zimbabwe. BRF is its wheat and maize milling and stock feed manufacturing subsidiary, while Nutresco is mainly involved in the manufacturing of peanut butter, corn/soya blend, and mahewu and soya chunks. Mitchell handles the company’s bakery operations.
Bakhresa Group is one of the leading industrial conglomerates in Tanzania and East Africa. Its operations are spread across Tanzania, Zanzibar, Uganda, Kenya, Rwanda, Burundi, Malawi, Mozambique and South Africa. The group has a grain milling capacity of 5,000 tonnes per day.