'RBZ wrapping up CAPS Holdings deal'

HARARE - The Reserve Bank of Zimbabwe (RBZ) is in final negotiations with shareholders of the country’s largest pharmaceutical group, CAPS Holdings (CAPS), amid indications government has already secured several takers for the drugs company.

Industry minister, Mike Bimha, last week told the businessdaily that while there were several local and international investors who wanted to snap up the company, his ministry and the central bank are still resolving shareholder matters with the current ownership.

“What actually happened was that we had a number of interested partners, but I was advised by the Reserve Bank that there were still issues they wanted to finalise with the previous owner or the current shareholder.

“They said they would want to actually get to a point where they would say they had finalised everything, telling us we could invite other investors after this point. Our discussion with the Reserve Bank governor was that let us finalise all issues,” Bimha said.

He noted that despite the hiccups, his ministry had already been approached by interested parties.

“There are a number of interested parties both local and beyond our borders. But, we do not want to bring in a new investor and then in a while find we still have outstanding issues,” Bimha said.

This comes as the Industry minister last year said discussions to finalise takeover of CAPS were proving difficult as the company’s largest shareholder, Frederick Mtandah, has been shifting goalposts mid-dialogue.

“With CAPS, we have had issues that have taken a long time to be resolved, issues to do with the current shareholders of CAPS. Negotiations have taken place with the ministry and the Reserve Bank of Zimbabwe (RBZ).

“Every time we thought we had reached an agreement then goalposts are changed the next day, and this has really taken a lot of our time, but we believe that we will continue with discussions,” the minister said.

The pharmaceutical group urgently requires $6 million in recapitalisation funds, with the drug-maker currently operating at five percent of installed capacity.

Government assumed control of the struggling drug-maker in August 2016 after buying out Mtandah, however, several unresolved matters still stand.

CAPS recently faced a critical funding shortfall, with its property escaping a public auction aimed at amortising a $4 million loan owed to two major banks — CBZ Bank and FBC Bank.

Through its special purpose vehicle aimed at housing bad loans — the Zimbabwe Asset Management Corporation — government recently assumed the pharmaceutical company’s debts to financial institutions.

CAPS is only operating one out of its four plants in the capital, Harare, as a result of lack of funding from new shareholders, government, leaving the country’s health institutions and donors with no option but to procure medicines, including intravenous drip water, outside the country.

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