CSC engages creditors over corporate rescue strategy

THE defunct State-owned meat processor and marketer, the Cold Storage Company (CSC), says it will hold its first creditors’ meeting this week under interim corporate rescue to receive a report on the “reasonable” prospects of rescuing the firm.

The meeting, which would also look at a host of other issues, is slated for Wednesday at the Zimbabwe International Exhibition Centre in Bulawayo.

Last year, the Government said CSC had been stripped of its assets prompting the shareholders to place it under corporate rescue to avoid liquidation.

According to a notice released by BDO Zimbabwe Chartered Accountants last week, the planned creditors’ meeting will focus on presenting the background to the voluntary corporate rescue procedures instituted by the Government, the shareholders of the company.

“The purpose of the meeting is to ratify the appointment of the interim corporate rescue practitioner of the Cold Storage Company Limited in terms of Section 124 (5) of the Insolvency Act (Chapter 6:07) . . . to receive a statement by the Master about the reasonable prospects of rescuing the company,” said BDO Zimbabwe.

The meeting to be held before the Master of the High Court in Bulawayo, will also focus on the presentation of an interim corporate rescue practitioner’s interim report, appointment of a creditors’ committee and to provisionally approve claims if possible.

“The Master may provisionally approve creditors’ claims.

“In this regard, if you are owed money by CSC (under interim corporate rescue), please contact BDO Zimbabwe offices so that you can collect and complete your proof of claim forms.”

The proof of claim forms were also available via electronic mail upon request and can also be downloaded from BDO Zimbabwe website, said the company.

In 2019, CSC secured a United Kingdom investor, Boustead Beef (Pvt) Ltd which committed to inject a minimum of US$130 million over five years for the revival of operations, refurbishing industrial assets such as ranches, feedlots and residential properties.

In his founding Affidavit filed at the High Court under case number HC1779/20 last year, Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister, Dr Anxious Masuka, outlined that as a major shareholder in CSC, the Government had entered into a Livestock Joint Farming Concession Agreement with Boustead Beef in which the investor has come up with a business implementation model.

He stated that the agreement was now difficult to implement as creditors threatened to attach CSC assets while former employees had destroyed critical documents.

CSC creditors who include urban councils (Harare, Bulawayo and Chinhoyi), National Social Security Authority (NSSA), and the Zimbabwe Electricity Transmission and Distribution Company were demanding immediate settlement of the arrears.

Dr Masuka also stated that the Zimbabwe Asset Management Company, which falls under the purview of the Reserve Bank of Zimbabwe and created to mop up non-performing loans, had threatened to sell CSC’s Bulawayo abattoir and the canning factory to settle a US$3,7 million debt.

“It also came to light that there is rampant corruption and unlawful dissipation of assets by certain executive members, board members and Government officials. More than 10 000 head of cattle have been misappropriated in the Government cattle heifer breed schemes.

“At the moment, the respondent (CSC) is only in control of approximately 25 percent of its assets,” Dr Masuka outlined in his affidavit.

He also alleged that former board members and executives had corruptly allocated themselves, family and other individuals various ranches and homesteads, denying the investor access to CSC assets to refurbish, develop and restock.

Dr Masuka said it was clear that unless something was done, the noble intentions of the Government to revive the company would be quashed. — chronicle.cl.zw