Investor pours $30m into CFI Holdings

CFI Holdings’ divisions, Agrifoods and Victoria Foods, will next month go for a scheme of arrangement after their judicial manager, Grant Thornton, courted an investor, Dominion Trading, which injected $33 million working capital into the food processing giant.

A scheme of arrangement is a court-approved agreement between a company and its shareholders or creditors.

It may affect mergers and amalgamations and may alter shareholder or creditor rights.

This means creditors will not garnish money from CFI accounts nor attach property over their debt to allow the company to revitalise and be fully operational, while staggering to settle the debt.

Grant Thornton judicial manager Mr Bulilisa Mbano, who is overseeing the incubation of the Agrifoods and Victoria Foods’ revitalisation exercise, said the company had invited its creditors for a scheme of arrangement scheduled for May to map the way forward on how to settle the debts.

The scheme of arrangement is expected to reschedule the debt and free up some space for capital and recurrent expenditure.

The investor is set to inject $18 million into Victoria Foods and $15 million into Agrifoods.

The two companies were placed under judicial management in September 2016, following a debt overhang that had buried the companies in the past few years and have been in the doldrums.

The companies are now proposing a scheme of arrangement with creditors.

Mr Mbano said CFI was grappling with a $20 million debt, hence the proposed scheme of arrangement.

“We are pleased to announce that we have found an investor who has injected more than $30 million working capital into CFI holdings divisions Agrifoods and Victoria Foods,” he said. “The deal has sailed through and we have invited creditors for a scheme of arrangement next month. We are hopeful that the two companies will soon be up and running once we are done with the modalities for their operationalisation.”

It has been projected that Victoria Foods revenue will progressively rise from $25 million in 2018 to more than $40 million by 2020.

The entity’s installed milling capacity is 147 000 tonnes per year.

Victoria Foods, once a giant milling company, is a subsidiary of agro-industrial concern CFI Holdings. It was forced to lay off its employees after it was placed under judicial management in 2016.