Zimpapers Logo

Exchange-listed firm.

The Russian tycoon, who initially had his sights on the Reserve Bank’s 67 percent stake in Cairns, flies into Harare on Thursday for a meeting with Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere.

If the discussions with Minister Kasukuwere are fruitful, Mr Varenko could inject between US$20 million and US$30 million into the cash-strapped firm.

But Minister Kasukuwere said Mr Varenko’s visit was yet to be communicated to him. He said he would consider the prospective investor’s bid and the potential benefits to the country.

Cairns, which is under judicial management, urgently requires about US$700 000 for working capital, but desperately needs fresh capital to clear debts totalling US$11 million.

The Russian billionaire is said to be interested in having young Harare businessman Mr Wicknell Chivhayo, who initiated the deal, as his indigenous partner in Cairns.

Mr Chivhayo confirmed last Friday that Mr Varenko was headed for Harare to discuss, not only his interest in buying RBZ’s stake, but also the possibility of buying out minorities in Cairns.

“He wants to negotiate with Minister Kasukuwere on the 67 percent stake held by the Reserve Bank of Zimbabwe,” he said.

“The Russian billionaire is coming on Thursday and he wants to make a request to be allowed to buy out minorities who hold the other 33 percent for a 100 percent stake.”

Mr Varenko, who would be making the investment through his company Visor Holdings, would need a special dispensation to hold more than 49 percent because the Indigenisation and Economic Empowerment Act requires indigenous investors to retain at least 51 percent shareholding in local companies.

Efforts to get a comment from Cairns judicial manager Mr Reggie Saruchera of Grant Thornton-Camelsa were unsuccessful on Friday.

But he once told creditors and shareholders he was working on a rescue plan for Cairns as liquidation was not an option.

“Although a consortium of banks is putting together efforts for the provision of funds to get it going, our main priority is to engage a reputable investor who is willing to come up with new and innovative ideas,” he said. The banks, who are owed nearly 65 percent of Cairns’ US$11 million debts, were reportedly keen to work with any “serious investor” and the negotiations started some time ago.

Last year, the company applied for voluntary judicial management due to operational constraints and failure to raise capital, but part of the firm’s capital challenges could be resolved through the disposal of its subsidiary, ME Charhons, with proceeds being used to pay off some creditors.