Home » Business » Govt Hailed for Saving Cairns

Governmentnbsp;has been hailed for averting the collapse of Cairns Holdings after it advanced $1 million to the company under the Distressed Industries and Marginalised Areas Fund.

In this regard, the Office of the President and Cabinet is expected to visit the company to see the positive impact the fund had on the firm. The Government, in partnership with Old Mutual came up with the facility in 2010 to help the distressed firms.

“On Monday the Office of the President and Cabinet will visit the company to see how the money disbursed under the Distress Industries and Marginalised Areas fund has been used,” Cairns judicial manager Mr Reggie Saruchera said yesterday.

Since 2011, 48 companies, half of them from Bulawayo, have received loans worth $28 million from fund.

Mr Saruchera said the $1 million obtained under the Dimaf sustained the company’s operations and saved about 700 jobs. The funds were used for recapitalising the business, thus enabling Cairns to increase production to 40 percent capacity from about 10 percent at the height of its crisis, said Mr Saruchera.

Crucially, the financial support has taken the company to a point where the High Court has endorsed its reconstruction scheme which will see Takura Capital, the new investor injecting $33 million.

The transaction is expected to be completed by September this year.

“Takura will be coming in; they are ready to takeover by September.

“We are now working on a proper handover takeover of the company,” Mr Saruchera said yesterday.

The process to find an investor, which should have been completed in 2013 dragged after the initial preferred suitor; Vasari Global Holdings took long to commit.

The coming in of the new investor will also help the company clear its $25 million debts, which could have seen the company going into liquidation despite its huge potential.

Takura Capital, which has also completed acquisition of the country’s oldest bakery, Lobels, also helped turnaround its fortunes to the glory of olden days and profitability.

Mr Saruchera said the fresh capital injection from Takura Capital would help increase production, enhance efficiency and cut down on costs of antiquated equipment.

The company has already achieved modest production capacity across its products brands and has turned around its financial performance from loss making to profitability.

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