Mutapa takes over Cottco Holdings
MUTAPA Investment Fund has taken over a 37,1% shareholding in Cottco Holdings Limited as the fund accesses a key asset that can post profits.
The takeover by Mutapa was first announced last year as part of the Finance, Economic Development and Investment Promotion ministry’s plan to give the fund profitable State entities to attract foreign investment for government. Treasury intends to use this foreign investment for its capex which it said is US$40 billion.
These profitable State entities which number 22 include liquid companies that combined now give Mutapa billions of US dollars in taxpayer-funded firms to manage.
“Following the promulgation of Statutory Instrument 156 of 2023, we wish to advise shareholders that government’s 37,1% shareholding in Cottco Holdings Limited, previously held in the name of Finance and Economic Development ministry is now held through Mutapa Investment Fund,” Cottco said in a trading update.
Mutapa’s acquisition of a stake in Cottco comes at a time when the parastatal is in talks with Treasury, the central bank and financial institutions to raise US$6,8 million to pay off cotton farmers for deliveries.
Leading these negotiations was the now former chief executive officer, Priscilla Mutembwa, who was appointed in October 2023 only to be fired in December.
In its trading update, Cottco said liquidity in the local economy remained constrained, with the company unable to draw down to the full extent of available facilities, despite having adequate security.
“The company was, however, able to settle US$19,6 million (83%) and ZWL$7,2 billion (18%) of the farmer payments dues in the respective currencies with outstanding dues expected to be cleared from product receipts by March 31, 2024,” Cottco said.
Cottco is projecting to break even for the year ended March 31, 2024, in US dollar terms as it exports the white gold.
“This comes on the back of improved cost management through the measures highlighted in the company’s last trading update,” it said.
In November, the Lands, Agriculture, Fisheries, Water and Rural Resettlement ministry announced that inputs from the Presidential Inputs Scheme for cotton will going forward be distributed by the Grain Marketing Board. Extension services under the ministry was also assigned to monitor cotton production.
Cottco said farmers who received inputs through the Presidential Inputs for Cotton Scheme remained contracted to deliver their seed cotton to Cottco.
Cottco said the final intake figures for the 2023 cotton buying season stood at 69 419 metric tonnes (mt) which was a 48% increase from the 46 748mt achieved in 2022.
However, erratic power supplies in the last quarter of 2023 delayed the completion of ginning, it said.
“To date 58 326mt (84%) of seed cotton has been ginned with only 1 066mt (2%) having been toll ginned in the Lowveld due to the high volumes in that area. Local and offshore lint customer collection is underway with 7 776mt of lint in stock,” Cottco said.
“Ginned seed on hand is 4 642mt and upliftment by seed suppliers and oil expressors is underway. 475mt of lint has been converted to yarn since April 1, 2023, to date.”-newsday
