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Business Reporter
CFI HOLDINGS said the deal in which a South African company, Grindrod Trading Limited wanted to buy a 49 percent stake in its subsidiary Victoria Foods has collapsed.In a statement filed at the Zimbabwe Stock Exchange, CFI said “the proposed acquisition of 49 percent stake in Victoria Foods by Grindrod, which was approved by shareholders, has been terminated”.

Reasons behind the collapse of the deal were not given. Efforts to get a comment from CFI chief executive Mr Steve Kuipa were unsuccessful by the time of going to print.

Grindrod had agreed to pay US$3,2 million for the CFI’s 49 percent shareholding in Victoria Foods. Under the transaction, Grindrod, a Johannesburg Stock Exchange-listed company, also wanted to provide Victoria Foods with a US$2,8 million shareholder loan at an annual interest rate of 8 percent, a circular published by CFI in June last year said.

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

CFI wanted to channel the proceeds from the sale towards debt restructuring, repayment of creditors and working capital requirements.
Further, CFI was going to restructure the US$2,8 million of its intergroup loan receivable that incorporates short-and long-term debt owed to it by Victoria Foods, into a shareholder loan.

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.