Cairns secures $4m loan to fund staff cut

Cairns secures $4m loan to fund staff cut

CAIRNSGolden Sibanda – Senior Business Reporter

CAIRNS has secured a $4 million bank loan to be used partly to finance a staff rationalisation exercise to reduce operating costs. The staff cut, however, is despite a promise by new investor, Takura Capital that it was not going to retrench after taking over.

Cairns which was under judicial management presided over by Grant Thornton and Camelsa’s Mr Reggie Saruchera since November 2012, exited reconstruction when Takura took over and injected fresh capital last year.

Well placed sources said the loan which was secured from a local financial institution is also meant for Cairns’ other immediate short-term funding needs, including working and low cost capital needs.

Cairns’ immediate funding needs include its new canning plant in Mutare, whose commissioning has been slightly delayed.

The Herald Business understands that the company will rationalise its staff, first through a voluntary retrenchment exercise.

In the event that the targeted number of staff does not take the package, sources said, a compulsory job cut will follow.

It was not immediately clear how many workers will be laid off, but Cairns is allegedly also targeting several senior managers.

The company has a total of 475 workers; most of them recalled when the previously troubled firm started its recovery.

“The new management is working on a voluntary retrenchment package. A number of the old guys who have been with the company for a long time will be laid off.

The source added that among those that could be sent home in the next phase of the staff rationalisation are a total of 88 managers, a move calculated to reduce cost of operations.

Cairns, has made considerable recovery strides, lifting production capacity from about 10 percent in 2010 to over 40 now.

Efforts to get a comment from Cairns were futile. Ms Nancy Guzha, Cairns Holdings chief executive-designate, had not provided responses to questions e-mailed to her last week, as she had promised to do so by the time of going to print yesterday.

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