LOGISTICS group Unifreight Africa will convene an extraordinary general meeting (EGM) next month to seek shareholder approval for the disposal of its controlling stake in Tredcor Zimbabwe (Pvt) Ltd (TrenTyre) for $2 000.
The EGM has been pencilled for March 11.
Unifreight owns a 51 percent stake in Tredcor, but the subsidiary is weighing heavy on the group after the latter’s liabilities exceeded its assets by $5,7 million as at mid-last year, and further deteriorated to $6,1 million as at year-end.
In a circular to shareholders today, Unifreight said “the primary rationale for the proposed transaction is to immediately stem the losses from TrenTyre which losses are unlikely to reverse in the foreseeable future, given the current difficult operating environment and undercapitalisation of the business.”
Unifreight plans to sell its 51 percent stake to ScanLink (Pvt) Ltd for $2 000. ScanLikn is a local firm owned by Mr Hamish Rutland, who is also a director and beneficiary shareholder of Unifreight and Tredcor.
Unifreight is concerned that if the transaction falls through, its consolidated financial position will continue to reflect the historical and anticipated future losses TrenTyre.
For the half-year to June 2015, Unifreight’s operating loss degenerated to $1,2 million compared to $476 000 last year on the back of increased restructuring costs.
The group closed its Botswana subsidiary last year and has since disposed of Pioneer Transport to its employees through a management takeover.
The cost of stopping the Botswana unit amounted $82 000, while Pioneer Coaches suffered losses of $390 000 and TrenTyre incurred a loss of $603 000. – BH24