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Martin Kadzere Senior Business Reporter
CFI HOLDINGS shareholders last Friday approved the disposal of its 49 percent stake in Victoria Foods to a South African company, Grindrod Trading Limited, for US$3,2 million. The voting was done through the ballot after a request from one of the major shareholders, Mr Nicholas van Hoogstraten, who was apparently against the transaction.
Of the 79 153 159 shareholders represented, 63 315 429 or 79,99 percent voted in favour while 15 873 730 or 20,01 percent voted against.

This now means CFI’s shareholding in Victoria Foods will be diluted to 51 percent in line with the indigenisation threshold. Under the transaction, Grindrod, a Johannesburg Stock Exchange-listed company, will provide Victoria Foods with a US$2,7 million shareholder loan at an annual interest rate of 8 percent.

The loan has no fixed tenure and interest may be varied, but subject to the limit set by the Reserve Bank of Zimbabwe. Grindrod will also sign various commercial contracts that would result in Victoria Foods accessing a US$12 million 90-day CMA grain procurement facility.

The proceeds of the proposed transaction would be channelled towards debt restructuring, repayment of creditors and working capital requirements.

The CFI group will restructure a US$2,8 million of its inter-group loan receivable that incorporates short- and long-term debt owed to it by Victoria Foods, into a shareholder loan.

CFI and Grindrod will constitute a new board of directors and new management team for Victoria Foods with Grindrod Trading appointing an equal number of representatives.

In a circular to shareholders, CFI said the injection of long-term capital into Victoria Foods and the restructuring of debt is projected to have an immediate positive impact on its financial performance, with the enhanced working capital position positively impacting inventory levels and revenue generation.

Grindrod Trading is a subsidiary of Grindrod Limited, a JSE-listed South African-based holding company involved in the movement of cargo by road, rail, sea and air.  Grindrod Limited operates four divisions — shipping, trading, financial services and freight services.

The trading division trades in agricultural products, industrial raw materials and marine fuels and lubricants. Victoria Foods manufactures baking flour, maize meal, snacks and packs a wide range of fast-moving consumer goods.