Business tycoon Nicholas Van Hoogstraten through one of his investment vehicles, has moved to increase shareholding in Zimbabwe Stock Exchange (ZSE) suspended agro-industrial group CFI Holdings under controversial circumstances.
It emerged at the company’s recent annual general meeting (AGM) that close to 1,8 million shares traded in an off-market transaction.
During a heated AGM, Van Hoogstraten’s son Loius Hamilton is said to have purchased the shares from NicozDiamond, in which they were under Stalap Investments without seeking approval from Stalap.
Addington Chinake, who was representing Stalap asked the CFI board led by Itai Pasi to explain why there was a movement of shares whilst the company is still under suspension from trading in the ZSE.
This forced Pasi to reveal the controversial deal.
“Our director approached us with a declaration that they have purchased certain shares and had requisite proof showing that they are holding the shares in question,” she said.
“We then had no option but to conclude those changes on the shareholding section.”
Pasi added that the transaction was an off-market private treaty sale, which as a company they cannot stop and had no say in it.
The 1,8 million shares are believed to have exchanged hands last year without approval from Stalap.
Major shareholders in the agricultural concern include Stalap Investments, which covers shares held by Zimre Holdings, National Social Security Authority and Nicoz Diamond, Messina Investment, EFE Securities Nominees Lt , Willoughby’s Consolidated Plc and Hamilton and Hamilton Trustees Ltd.
However, sources close to the company said the move was part of the tycoon’s plan to take total control of the company, which he believes is worth close to US$200 million.
“Yes, the deal was done in a contentious manner. His aim (Van Hoogstraten) is to take full control of the business because he knows the real value of the business which according to him is close to $200 million real US dollar.
“If he was not aware of the CFI’s value he could have disposed of it long back.
“But the fact that he continues to hold onto this investment it shows that he sees its potential, “said a source who requested anonymity.
Chinake also asked the CFI board to give an update on its engagement with the ZSE on the suspension of the firm from the bourse.
Pasi told him the group was in talks with ZSE management, and they expected a resolution soon.
Meanwhile, in a trading update, acting CFI chief executive Shingi Chibanguza said the firm’s performance to date was in line with its budget although the entity was not spared the chaotic market reaction owing to the fiscal and monetary policy changes.
This resulted in panic induced consumer demand as customers were in a rush to convert monetary balances to commodities and goods.
“The changes disrupted our second edition of the Gold Rush Farm and Win promotion, which we had to suspend following unsustainable dynamics in the trading environment in the first quarter,” he said.
Chibanguza said in the first five months of the year ending February 2019, the company refurbished its Farm & City Chinhoyi branch and invested RTGS$1.2 million in distribution trucks.
It also bought branch managers vehicles to assist in enhancing marketing and operational efficiencies.
In its farming operations, Glenara established 107 hectares of irrigated soya beans, 459 hectares of dry land soybeans in addition to table potato production.
In 2018, the group recapitalised farming operations at Glenara Estates through the purchase of US$1 million worth of new farming equipment and machinery.
Chibanguza said Glenara was now profitable on the back of a farm recapitalisation undertaken in the previous period.
“The group is now seized with finalising layout plans regularisation and development preliminaries to give impetus to the development stage of the project,” he said referred to the property division.
Chibanguza added that, given the reduced gearing, improved profitability and cash generation by the business, the entity was now on an exciting growth trajectory.
Expenses rose 26% compared to the prior period as the group undertook measures to cushion employees from the high cost of living in a market characterised by price distortions and inflationary pressures.
The group repaid RTGS$1,1 million worth of debts during the period, leaving a nominal RTGS$312 000 loans outstanding as at the end of February outside loans owing under joint venture arrangements.
“The group advanced a loan of RTGS$2,2 million to Agrifoods at the end of prior year and this earned the group a net finance income of RTGS$79 000 for the five months to end February 2019,” Chibanguza said.
CFI management is also optimistic that it will soon take Victoria Foods and AgriFoods out of judicial management.