Boustead Beef taking government for a ride again but this could be short-lived

It is not clear from the first story why Boustead Beef was described as a new partner when it signed an agreement with the government in January 2019. More importantly it was not clear why the revival of the plant was centred on repairing compressors and not what Boustead Beef agreed with the government.

According to the agreement Boustead Beef was supposed to invest US$45 million in the first year as follows:

• Refurbishing of abattoirs, canning factory, distribution US$6 million.
• Working capital abattoirs, canning factory, distribution US$5 million.
• Logistic fleet, vehicles, distribution- abattoirs US$2 million.
• IT systems/meat matex/stock control/etc US$3 million.
• External cattle purchase facility US$5 million.
• External buy back facility for processed beef US$5 million.
• Capital expenditure ranches and feedlots US$4.5 million.
• Working capital ranches and feedlots US$3 million
• Logistics fleet ranches, vehicles US$1.5 million
• Cattle purchase US$10 million

None of these were fulfilled resulting in the government seeking corporate rescue for the company.

In terms of the corporate rescue plan, the practitioner was supposed to:

1. to investigate the company’s affairs, business and property and financial situation in terms of Section 134 of the Insolvency Act;
2. investigate previous CSC operations and expose the weaknesses within the systems and recommend possible solutions;
3. investigate adherence to corporate governance principles and recommend aspects that require strengthening;
4. confirm the number and status of the properties and ascertain the status of all CSC assets;
5. investigate claims of asset stripping or any other activities and institute measures to stop the asset stripping immediately;
6. examine the Scheme of Arrangement and recommend appropriate measures;
7. investigate the employment and dismissal of employees from the date the Joint Venture was signed;
8. examine and recommend Pension benefits due to the employees;
9. examine Boustead Beef (Pvt) Ltd’s current operations (investments made and operational initiatives implemented since the signing of the agreement) and establish whether or not it has capacity to revive CSC and advance the Livestock Growth Plan.

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