ZIMBABWE – Tanzanian milling giant Bakhresa Group has applied to Government for a special exemption to equity laws to give it permission to acquire 75 percent stake in Blue Ribbon, sources said.
Blue Ribbon has already concluded negotiations with the investor in a deal expected to bring in $40 million fresh capital.
However, sources said the deal has not been finalised because Bakhresa wanted to acquire a 75 percent stake in Blue Ribbon in contrast to Zimbabwe’s equity laws, which limit foreign ownership to 49 percent.
The source said Bakhresa, which recently invested in a milling business in Durban South Africa, was keen on putting a footprint in Zimbabwe.
In terms of the country’s equity laws, foreign investors can only hold a maximum of 49 percent while locals should hold the balance.
However, foreigners can apply for more than the prescribed threshold at the discretion of responsible minister.
Blue Ribbon, manufacturer of popular brands Ngwerewere and Chibataura, recently agreed terms with a supplier to enable it to resume operations on the maize milling plant.
Judicial manager Mr Reggie Saruchera of Grant Thornton Camelsa, said Blue Ribbon requires $30 million to $40 million, of which $15 million is for working capital and the balance for other obligations.
The company is buckling under heavy liabilities and shortage of funding to support operations, which forced it to put workers on shifts to manage costs.
The investor will have to clear the $30 million liability saddling the company apart from injecting fresh funding for recapitalisation and working capital.
Blue Ribbon has five main divisions, BRI logistics, Blue Ribbon Foods, JA Mitchells and Nutresco Foods.