Interfresh in $3m rights offer

HARARE - Zimbabwe Stock Exchange-listed horticultural concern Interfresh Limited (Interfresh) plans to raise $3 million — to recapitalise operations and retire debt— through a rights offer.

Tawanda Namusi, Interfresh company secretary said the expropriation of the group’s Mazoe Citrus Estate (MCE) by government in January resulted in a loss of revenue and assets impairment leaving the balance sheet in need of restructuring through an increase in equity funding.

“It is the opinion of the directors that the working capital available to the company and its subsidiaries is not sufficient for its working capital requirements, hence the proposed transaction,” he said.

The proposed rights offer to current shareholders through the issue of 150 million shares with a nominal value of $0,01 at a subscription price of $0,02 is, however, subject to approval by shareholders at an extra ordinary general meeting to be held later this month.

Early this year government compulsorily acquired the Mazoe estate that had citrus lemons, seed soya bean, commercial and seed maize and horticultural produce on this land.

The portion of land represented 46 percent of MCE’s total arable land 30 percent of its budgeted revenue for the financial year 2013 and 52 percent of the value of immovable and biological assets.

Market watchers say Interfresh’s rights issue — which is being written by Metbank Limited — will help the horticultural concern’s capacity to consolidate the gains of the company’s growth strategy.

The listed group, which is in the business of producing, processing and marketing agricultural, horticultural, agro-industrial and allied food products in both the local and export markets, has since dollarisation in 2009 not been adequately recapitalised but relied on debt financing to sustain its operations.

In 2011 the company secured a $5 million six year loan to fund both capital expenditure and working capital.

Later the same year Interfresh also disposed of the Graniteside property complex to retire most of its short-term debt and also provide working capital relief.

Namusi said last year the firm experienced severe working capital constraints and could not significantly increasing borrowing due to high cost of borrowing and tighter requirements for security by lenders.

“During recapitalisation negotiations in the fourth quarter of 2012, the company secured a $1,25 million short term loan from Icejay Investments (Private) Limited,” he said.

The company has three strategic divisions namely, Citrus, Flowers and Trading, each with a specific and autonomous area of focus.

Experts however said the expropriation of part of Interfresh’s estate in Mazoe threw talks with a potential investor into jeopardy.

Interfresh issued a cautionary statement in December last year announcing that there was an impending transaction which could affect its share price.

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