Govt finds suitors for CAPS
GOVERNMENT is said to have secured a potential investor for the troubled drugs maker, CAPS Holdings, for an undisclosed cash injection to bail out the business, the Financial Gazette’s Companies & Markets (C&M) can reveal.
CAPS is majority-owned by businessman, Frederick Mtanda, who has interests in the automobile and other sectors.
Government is understood to have opened discussions with Mtanda to save the business, official sources said.
This was also confirmed by Industry and Commerce Minister, Mike Bimha, who told C&M on the sidelines of a CEO conference organised by the Standards Association of Zimbabwe in Nyanga recently that negotiations with Mtanda had significantly progressed.
He, however, did not disclose the identity of the potential investors.
“We are in the process of discussing with the major shareholder in CAPS Holdings. We have investors who I cannot name at the moment but they want to get CAPS back on line,” said Bimha.
CAPS, one of the country’s most strategic drugs manufacturing enterprises, was once one of the largest pharmaceutical companies in sub-Saharan Africa before it plunged into financial crisis due to debts and domestic problems with drugs manufacturing.
Mtanda de-listed the company from the local bourse in 2011.
Its industrial complex in the Southerton area in Harare survived a public auction two years ago which was aimed at raising about US$4 million owed to CBZ Bank and FBC Bank.
The auction followed a High Court judgement in favour of the financial institutions.
It was later placed on sale by private treaty after it failed to generate viable offers. Mtanda, however, negotiated with the financial institutions to suspend the sale.
The pharmaceutical group has been using the complex which sits on 17 043 hectares as its head office.
Units under the CAPS group include QV Pharmacies, Caps Pharmaceuticals, Geddes Limited and St Anne’s Hospital.
It also runs CAPS South Africa and CAPS Botswana.
Recently, Mtanda told this paper that government had pledged to take over CAPS’ debts after Cabinet approval.
However, government had been unable to bail out the pharmaceutical firm.
Various schemes proposed by shareholders to revive operations have failed to take off after it struggled due undercapitalisation, massive debts and allegations of mismanagement.