British tycoon to make mandatory offer to CFI minorities

British property magnate, Nicholas van Hoogstraten, could make a mandatory offer to CFI Holdings minority shareholders after raising his stake in the diversified listed firm to 35 percent.

Through his investment vehicle Willoughby’s Investments Private Limited, van Hoogstraten has raised his CFI stake from 24 percent over recent weeks, triggering the compulsory offer.

CFI is the holding company of agro-industrial entities Agrifoods, Crest Breeders, Victoria Foods as well as retail chain Farm and City Centre. The company’s fortunes have been affected by slowing turnover, sustained losses and working capital deficits over the past two years. CFI also has interests in real estate.

In a letter to CFI acting chairperson Grace Muradzikwa dated June 9, 2016, Willoughby’s said it was considering making a compulsory offer.

“We have been advised by EFE Securities (our main brokers in Harare) that the Zimbabwe Stock Exchange listing rules require that after acquiring control of 35 percent of the issued shares in a company, one is required to make a mandatory offer to minority shareholders,” Willoughby’s said in the letter.

“Therefore having breached the 35 percent mandatory offer threshold we would like to notify management of CFI Holdings of our intention to meet the requirements of the mandatory offer. In consultation with our brokers we are working on the modalities of preparing the offer to minority shareholders as per the requirements,” Willoughby’s added.

CFI has, since the move to the multicurrency system in 2009, experienced significant financial challenges largely caused by expensive borrowings, and the impact of ageing equipment and infrastructure on efficiencies and overheads, which are not adequately aligned to the low capacity utilisation at the firm.

Its shares were suspended from trading on January 29 this year to allow for the publication of audited financial statements for the year ended 30 September 2015. The suspension was lifted on May 26.

CFI recently instituted a management shake-up in a bid to revive its fortunes. In April this year it retired its long standing chief executive Stephen Kuipa and replaced him with Timothy Nyika, who was appointed in an acting capacity.

Chairman Simplicius Chihambakwe and another board member, P Bwerinofa also left the company in April, while former finance director Acquiline Chinamo quit at the end of last year.-The Source

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