ZIMBABWE – Dairibord Holdings Limited (DHL) is still in pursuit of acquiring and merging with fellow Zambian dairy firm Dendairy Private Limited, with the former issuing its 10th cautionary statement indicating that discussions were still ongoing.

The planned transaction, according to NewsDay was first announced in July 2020 with DHL seeking to leverage on Dendairy’s strategic investments into production of dairy products and its access to the regional market.

“Shareholders are advised that Dairibord Holdings Limited is still in discussion with an unlisted entity Dendairy (Pvt) Ltd for a merger and acquisition transaction.”

Dairibord Holdings Limited

According to reports, in 2018, Dendairy started a project to expand operations at its Kwekwe plant, which would have seen the firm adding three new packaging lines to increase production from 4.6 million litres per month to eight million litres.

However, the project was delayed by funding and the COVID-19 pandemic which disrupted procurement.

As such, the successful conclusion of the discussions could lead to improved raw milk production for DHL while also boosting foreign currency earnings and local market share in the dairy sector.

“Further to the cautionary announcement published in the Press on July 1, 2020 and subsequent updates on July 22, 2020, August 13, 2020, September 4, 2020, September 25, 2020, October 16, 2020, November 6, 2020, November 27, 2020 and December 18, 2020, shareholders are advised that Dairibord Holdings Limited is still in discussion with an unlisted entity (Dendairy (Pvt) Ltd) for a merger and acquisition transaction,” DHL company secretary Samson Punzisani said in a statement.

“Accordingly, shareholders are advised to continue exercising caution when dealing in the company’s shares until further notice.”

Dendairy is a producer of dairy products and fruit juices in the Southern African country. Scandinavian private equity investment firm Spear Capital holds a stake in it.

DZL which is one of the leading milk and dairy products producer in the country reported significant business recovery in the third quarter as the COVID-19 lockdown eased and forex access improved.

According to the company, its sales volumes grew 32% ahead of Q2, with the rise recorded across all product categories i.e., liquid milks 15%, foods 74% and beverages 50%.

However, volumes for the quarter were 10% below Q3 of 2019 but showed a recovery compared to the 46% decline recorded in Q2 2020 vs Q2 2019.

While cumulative sales volumes remained below 2019 at 26% down, the trajectory shows a recovery from the 32% decline recorded in H1.

Revenue for the quarter in inflation adjusted terms was 43% above prior quarter and 8% above Q3 2019.

Year to date revenue was 8% below the same period in 2019 and the cumulative reduction is on account of depressed H1 performance.

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