The Zimbabwean government has reportedly cancelled a US$130 million deal with a United Kingdom company, Boustead Beef (Boustead) for the recapitalisation of the Cold Storage Company (CSC).
Under the deal, announced in November 2018, Boustead undertook to inject US$130 million to revive CSC while inheriting the meat processor’s debts amounting to US$42 600 000 and also taking over its ranches and properties dotted across the country for an initial period of 25 years.
However, Agriculture Minister Perrance Shiri reportedly told cabinet on Tuesday that Boustead had expressed reservations about the deal following its due diligence.
Bousted lost appetite for the deal after it emerged that CSCs’ level of indebtedness had been grossly understated and that it had lost the majority of its assets.
The investor also realised that most of CSC’s facilities had become so derelict they would be too costly to bring back to life. NewZimbabwe.com quoted its cabinet source as saying:
Shiri presented a report to cabinet in which he urged government to terminate the deal and adopt a new rescue plan for CSC because the current arrangement with Boustead was not materialising.
Meanwhile, the decision to terminate the deal is yet to be officially announced.