Clean bill of health for BRI, Cairns
TWO of the country’s industrial giants — Blue Ribbon Industries (BRI) and Cairns Holdings Limited — have turned the corner following their placement under judicial management about four years ago in what comes as a major relief for the 500 employees engaged by both companies.
The Financial Gazette’s Companies & Markets can exclusively reveal that the High Court has given both companies a clean bill of health by cancelling judicial management orders that were issued to BRI and Cairns in 2012.
Judicial manager, Regis Saruchera, of Grant Thornton Camelsa who has been working tirelessly to get both companies back on the rails confirmed the developments last week.
Resultantly, BRI and Cairns have since been handed over to their new shareholders secured during the period of external administration.
BRI was taken over by a Tanzanian firm called Bakhresa last year in a US$40 million deal, while Takura Investments swooped on Cairns.
The fresh capital injections by Bakhresa and Takura helped BRI and Cairns defuse acute cash flow problems that nearly spelt their demise.
“The judicial management order for Blue Ribbon Industries, which was acquired by Said Salim Bakhresa of Tanzania, was cancelled (by the High Court of Zimbabwe) on February 17, 2016,” said Saruchera.
“The judicial manager has completed the successful handover of the company to the new investor, immediately securing over 150 jobs.
“Cairns was taken out of judicial management on October 28, 2015, following the successful implementation of a scheme of arrangement with members and creditors. The turnaround of both BRI and Cairns has resulted in over 500 jobs being saved,” he added.
BRI was closed in 2012 due to funding constraints that were compounded by heavy debts.
It returned to production in 2014.
Bakhresa is expected to inject a total of US$40 million in BRI in the next five years.
So far, the Tanzanian milling giant has injected about US$20 million, according to sources close to the deal.
This funding will be channelled towards recapitalisation and repaying creditors, workers and financial institutions.
A further US$20 million will be invested in the next five years to replace ageing equipment.
BRI was once one of the country’s largest millers, operating strategic business units that include BRI Logistics, Blue Ribbon Foods, JA Mitchels and Nutresco Foods.
These units remain strong brands with capacity to compete on the domestic and foreign markets.
The producer of the leading maize meal brands, Chibataura and Ngwerewere, BRI still has considerable infrastructure.
Cairns applied for voluntary judicial management four years ago after facing operational challenges.
About 65 percent of its US$25 million debt was owed to banks.
After Cairns failed to raise about US$20 million required to deal with its woes, it was placed under judicial management, after which Saruchera arranged its takeover by Takura Capital.
Takura snapped shares previously held by the Reserve Bank of Zimbabwe through the Finance Trust.
Takura was expected to invest US$7 million into the business on signing the agreement.
An additional US$7 million was to be paid to scheme participants.
Saruchera indicated in July last year that Takura would inject over US$5 million to return the firm to full production.
Cairns was placed under provisional judicial management in 2012 due to insolvency.
Its final judicial management was announced in February 2013, the same year it delisted from the Zimbabwe Stock Exchange.
Its two subsidiaries were Cairns Foods Limited and ME Charhons.
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