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Grindrod to buy into Zim company

Harare - Grindrod [JSE:GND] through its subsidiary Grindrod Trading is set to buy a 49% shareholding in Zimbabwean milling company Victoria Foods.

According to a circular to shareholders released by Victoria Foods’ parent company CFI Holdings Limited, Grindrod will be issued with  812 841 Victoria Foods ordinary shares representing 49% of the company.

The subscription price to be paid by Grindrod will be US$3.25m. As part of the proposed transaction, Grindrod will provide Victoria Foods with a $2.75m shareholder loan which will bear interest at a rate of 8% per annum.

The loan has no fixed tenure, and interest may be varied but subject to the limit set by the Reserve Bank of Zimbabwe.

Grindrod will also sign various commercial contracts that will result in Victoria Foods accessing a $12m 90-day, CMA grain procurement facility for use in its operations. 

The deal is however yet to receive regulatory approval from various Zimbabwean authorities, including the ministry of indigenisation and economic empowerment.

CFI sharesholders are also expected to approve the deal at an extraordinary meeting to be held in July.

If the deal is approved, CFI and Grindrod will constitute a new board of directors and new management team for Victoria Foods with Grindrod Trading appointing an equal number of representatives.

Victoria Foods is a maize and wheat milling company, while Grindrod Trading trades in agricultural products among other activities.
 
 - Fin24
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