Troubled state-owned meat processor Cold Storage Company (CSC) may be seeing its last days amid revelations its new investor is facing serious challenges in raising the required capital to revive operations.
In 2018, Boustead Beef was unveiled by the government as the new investor who would run the CSC.
Lands, Agriculture, Water, Climate and Rural Development minister Perrance Shiri, at the time of the announcement of the new equity partner, suggested that Boustead Beef would inject fresh capital to cover basic essentials towards the revival of the company. This included working capital.
A US$36 million debt on the books of the CSC created an obstacle to the much-hyped deal. When the equity partner was announced, Shiri said the debt would be cleared by the new investor.
An investigation by the Zimbabwe Independent at the time revealed that Boustead Beef was a briefcase company registered in Zimbabwe although the government said it was a United Kingdom-based meat processing giant.
Officials close to the latest developments told the Independent this week Boustead Beef management was facing serious viability challenges.
“There are many teething problems around that company (Boustead Beef). The management claimed that they were able to raise the required funding when they met with government. It is increasingly clear the issue of raising the required capital was just a ruse aimed at convincing the government to give them the right to run the affairs of the company,” said a source. “If you follow closely, there have been reports that the company’s new managers were stripping the company’s assets and selling them. They are also said to have ordered that all the companies that are renting some of the CSC properties in other parts of the country should pay rentals directly to the investor.
“These are the monies Boustead Beef was hoping to pool together and then use as the new funds. But they are racing against time as everyone, even government itself, is getting agitated and restless over the delays in the starting of business, if they are ever going to start,” the source added.
Boustead Beef’s only known face to the company, Nick Havecroft has been difficult to reach for comment in recent weeks. He has not been answering calls.
Bousted beef has engaged businessman Reginald Shoko as its spokesperson.
Shoko told the Independent the Boustead Beef management was “working on a programme of action” to get the CSC out of the doldrums.
“The management has been busy at work. The company has been finalising the retrenchment of 177 permanent workers who were seconded to Boustead Beef by government. This is meant to enable the employer to put in place new contracts for new employees under Boustead Beef,” Shoko said.
“In as far as the investments are concerned, the investor will make the necessary disclosures at the material time. What I am sure about is that there is work that has been and is being done to ensure that the company starts working again.”