Blue Ribbon Industry (BRI) creditors have approved a scheme of arrangement that will see Tanzanian firm Said Salim Bakhresa injecting US$40 million in the next five years to turn around the fortunes of the cash-strapped grain milling company .
In a creditors meeting held on Wednesday, Judicial manager Reggie Saruchera of Grant Thornton told that Blue Ribbon Industries will by year end operate at full capacity, with the investor set to inject an initial US$18 million into the distressed firm.
"Mr Nigell Chanakira, who is chairperson of Zimbabwe Investment Authority, promised to give us the certificate today (last wednesday) to have Bakhresa invest in Zimbabwe. We have secured Reserve Bank of Zimbabwe approval as well," said Saruchera.
"We waited for three‒and-a-half years and we were looking for a serious investor because BRI requires real money for it to take off. It needs farmers who supply the grains. At least US$10 million is required for raw materials only. So real money is required."
Saruchera said the handover to the new investor would be done in the next month or two after sorting out conditions surrounding the grain supply agreement which was signed between BRI and Mega Market in June 2013.
Blue Ribbon was placed under provisional judicial management on September 5, 2012 under Saruchera of Grant Thornton.
Registration of bidders was done in February 2013 followed by selection of bids in May the same year.
Bakhresa won the bid ahead of Grindrod and Takura Capital after the companies bid price was adjudged far better than that of its competitors.
In June 2014 the judicial manager implemented the grain supply agreement with Mega Market to keep the brands alive.
Saruchera said the appeal to the Ministry of Indigenisation which commenced in May 2013 was only approved in May 2015.
Under the arrangement, Bakhresa will acquire the entire shareholding of BRI, at a purchase price of US$1, thus giving it full ownership of the company.
Through the arrangement, the Tanzanian conglomerate will inject US$18 million in the business with US$12 million covering liabilities and US$6 million going towards capital expenditure and working capital.
