Fight for CSC is more for its US$100 million assets than reviving operations

Boustead Beef, which entered into an agreement with the Zimbabwe government four years ago to revive the Cold Storage Company, seems to be more interested in the company’s assets than in reviving its operations.

The assets are said to be worth about US$100 million today.

Boustead Beef, which came in as a British investor but is fronted by a former Marondera farmer, Nick Havercroft, was handed over title deeds to CSC properties on 31 January 2019.

According to documents signed by Robert Verworn who represented Boustead Beef, the assets included abattoirs, distribution/selling depots and the canning plant which were valued at US$33.7 million; ranches and feedlots worth US$1.5 million; and residential properties estimated at US$3.9 million.

The assets were officially handed over to Boustead Beef on 22 February 2019 when the Ministry of Lands and Agriculture and Boustead Beef Zimbabwe signed the Joint Livestock Farming Concession Agreement.

According to a letter from the then Permanent Secretary for Lands and Agriculture, Ringson Chitsiko, to the CSC management, dated 27 February 2019, Boustead Beef was given “the full control and management of all assets and operations of the former Cold Storage Company” from that date.

“The former Cold Storage Company is now defunct and the former board has been dissolved with immediate effect,” the letter said.

“My ministry expects you to render full cooperation to Boustead Beef Zimbabwe and make all documents available.

“Please insure (sic) that all members of staff are informed. It is vital that the revival of the Cold Storage Company is speeded up for the benefit of all citizens of our country…”

The CSC assets were, however, worth considerably more because an independent valuation done the previous year, 2018, said that the assets had a fair market value of US$32.6 million and a book value of US$84.8 million.  This translates to US$98.7 million today in US dollar inflation adjusted terms.

According to a statement issued by Information Minister Monica Mutsvangwa in a post-cabinet briefing in May, Boustead Beef was supposed to:

• raise and invest a minimum of US$130 million into CSC over five years, being for both capital expenditures and working capital for the business;
• pay off CSC financial debts totalling US$42 530 597;
• pay rentals of US$100 000 per annum during the first five years of the concession agreement;
• take over and run the management of the following CSC ranches for an initial period of 25 years: Maphaneni; Dubane; Umguza; Chivumbuni; Mushandike; Willsgrove; and Darwendale;
• take over and run the management of the following abattoirs for an initial period of 25 years: Bulawayo; Chinhoyi; Masvingo; Marondera; and Kadoma; and
• take over and manage for an initial period of 25 years, the Harare, Gweru and Mutare distribution centres and residential properties of CSC.

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