ZIMBABWE – The Competition and Tariff Commission (CTC) of Zimbabwe has put a halt on Innscor’s plan of disposing its 25% shareholding in Capri, the largest refrigerator manufacturer in the country.
Innscor, manufacturer of consumer goods products in Zimbabwe sought to dilute its shareholding in Capri from 50.1% to 25.5% then down to 25%, so that the group can focus on production of consumer goods.
Founded in 1987, Innscor operations include that of the light manufacture of fast moving and durable consumer goods.
Its light manufacturing business includes the operations of National Foods Holdings Limited, Colcom Holdings Limited, Irvine’s Zimbabwe (Private) Limited, Bakeries, Appliance Manufacturing, Natpak (Private) Limited, Profeeds (Private) Limited and Probrands (Private) Limited.
The company is also is involved in the manufacture of stockfeeds, edible oils, bakers’ fats and sale of other general household products; the production, processing and marketing of pork and related food products; the production of chicken, table eggs and day-old chicks; manufacturing and retailing of household goods and appliances, and production of various bags for packaging, such as the open mouth bags, general purpose bags and carrier bags.
Innscor controls 50.1% in Capri through its investment vehicle Skitap while the remainder is held by Catterson Marketing.
According to a report by Zimbabwe Independent, Innscor intended to swap its 50.1% shareholding in Capri for 100% shareholding in Skitap. Further, Skitap would sell 0.1% of Capri to Catterson Marketing such that shareholding in Capri is equally divided between Catterson and Skitap at 50% each.
Thereafter, a Mauritius-based investment holding entity called SSCG Africa Holdings through its vehicle Annunaki Investment would acquire 50% of Skitap, thus acquiring indirect 25% shareholding of Capri.
Zimbabwe Independent has further revealed that investigation into the deal was completed and, after the CTC board convened recently, a unanimous decision to block the transaction was made on the basis that the involved parties failed to meet the requisite guidelines.
“They were penalised for late notification. A notification (application for go-ahead) should be done within 30 days after signing an agreement, which they didn’t do,” a source said.
It is understood that Innscor notified the CTC after the lapse of the recommended period in November last year after reaching an agreement with Annunaki in July 2018.
According to section 34 (a) of the Competition Act, a party to a notifiable merger is required to notify the commission in writing of the proposed merger within 30 days of the conclusion of the merger agreement between the merging parties; or the acquisition by any one of the parties to that merger of a controlling interest in another.
The Act stipulates that failure to give notice of the merger or proceeding to implement the merger without the approval of the commission attract a penalty not exceeding 10% of either or both of the merging parties’ annual turnover in Zimbabwe as reflected in the accounts of any party concerned for the preceding financial year.
“Stakeholder consultations are on-going. The Commission is still at stakeholder consultations stage,” CTC director Ellen Ruparanganda said.