Chiwenga praises Boustead beef – Bulawayo24 News

BOUSTEAD Beef, a company currently undertaking the relaunch of the Cold Storage Company (CSC), has so far pumped $24 million into the business, which is a complete violation of the joint livestock concession agreement. (LJFCA) signed in January 2019.

According to the LJFCA signed on January 22, 2019 by the government and Boustead Beef, the investor was expected to raise and invest a minimum of US$130 million in the project over five years, both for capital expenditure and the fund. turnover to run the business.

The total first year investment was supposed to be $45 million, broken down as follows: Slaughterhouse Renovation, Cannery, Distribution ($6M), Slaughterhouse Working Capital, Cannery, Distribution ($5M) , logistics fleet, vehicles, distribution slaughterhouses (2 million USD), information technology systems or meat matrix or inventory control (3 million USD), facility for external purchase of livestock (5 million USD), facility external buyout for processed beef ($5 million, capital expenditures and feedlots ($4.5 million), working capital ranches and feedlots ($3 million), logistics fleet ranches , vehicles ($1.5 million), purchase of livestock ($10 million).

But at the official reopening of the beef processing plant in Bulawayo on Thursday, Vice President Constantino Chiwenga revealed that Boustead Beef had injected just $24 million into the business.

“I am reliably informed that to date $24 million has been invested in resuscitating the Cold Storage Company, which has been dormant for 22 years,” he said in his speech.

According to the LJFCA, CSC has the right to terminate the agreement if Boustead Beef fails to comply with clause 4.1 within four months of signing the agreement. Clause 4.1 indicates that Boustead Beef should, upon signing the agreement, provide evidence of funding of up to US$130 million over five years within four months.

As part of the agreement, the CSC or the government was supposed to receive $100,000 in fixed rent for the first through fifth year per year, and the year “shall begin January 1, 2019 and 8% of the total actual income or turnover per month. , commencing with the first month of year six in this Agreement, from the effective date until year 25. This sum shall be paid no later than the 10th of each following month”.

“This will apply from the effective date until the expiry of the agreement when the managing partner, Boustead Beef, is due to have settled the debt inherited from CSC. Thereafter, and from Upon renewal of this agreement, CSC will negotiate an increase in total actual revenue or a return on revenue with Boustead Beef,” the agreement reads in part.

Meanwhile, Boustead Beef has approached the courts to seek an end to corporate rescue proceedings. CSC went into receivership in 2020 after the government claimed the LJFCA it entered into with Boustead in 2019 was difficult to implement as creditors at the time were making plans to seize the company’s assets. company.

Ngoni Kudenga of BDO Zimbabwe Chartered Accountants was later appointed as a Business Rescue Practitioner, before being disqualified on conflict of interest grounds.

Kudenga was then replaced by Vonani Majoko of Majoko and Majoko Legal Practitioners, who was also recently dismissed.

In his founding affidavit, Boustead’s acting chief executive, Reginald Shoko, said the government had given his company control of the meat processor, hence the need for a corporate bailout.

“The Claimant (Boustead Beef) has managed the affairs of Cold Storage Company (Private) Limited in pursuit of the provisions of the Joint Breeding Concession Agreement entered into with the Government of Zimbabwe; and as such , there is no other cause for the Cold Storage Company (Private) Limited to remain under the corporate bailout,” Shoko said in a petition filed on August 15, 2022.

“The plaintiff is hereby informed and agrees that this honorable court sets aside the order of the court which commenced the proceedings for the rescue of the business, pursuant to section 125 of the Insolvency Act.”

“This is a request for termination of corporate rescue proceedings regarding Cold Storage Company (Private) Limited, of which the plaintiff is aware,” Shoko said.

He named Agriculture Minister Anxious Masuka and Deputy High Court Master as first and second defendants.

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