Source: CSC utility debts scale US$40m – The Zimbabwe Independent November 16, 2018
STATE-OWNED beef supplier Cold Storage Company (CSC)’s utility debts have hit the US$40 million mark, it has emerged.
Sources at the once vibrant meat processor told the Zimbabwe Independent this week that the debt would continue to balloon unless a clear strategy was put in place to arrest the increase.
This comes after government announced on Tuesday that it had entered into an agreement with an investment partner, Boustead Beef (Pvt) Ltd, for a US$130 million joint venture, whose terms of reference and engagement have however remained a closely guarded secret.
“As things stand, we have utility bills that were estimated at US$36 million in June when the evaluation was done,” said a source.
“I am sure that by now, that bill has gone up to US$40 million because we have not serviced any of those bills because of financial challenges. CSC does not have money to service those bills. We are eager to service them but because we have not been generating any meaningful resources, their servicing will remain a pipedream.”
Bills are reportedly being accumulated from urban local authorities and rural district councils where the meat processor has infrastructure that used to form part of the company’s operations.
Other amounts are owed to the power utility Zesa, telephone operator TelOne, and the pension fund where the company is said to have failed to remit pension contributions from workers.
“You will realise that some of these debts are legacy debts which have accrued for the last 15 to 20 years. We hope that, one day, we will get money to service those debts. We also hope to be in a position to rehabilitate plant and equipment so that when we eventually start operating, things will just roll,” the source added.
The Independent understands the CSC board had negotiated for a scheme of arrangement with its creditors, which should see the meat processor start making payments to creditors by March next year. “We have a scheme that we negotiated with creditors, which was the only way out. Our projections are that we should be able to start paying creditors by March next year should all things fall into place,” the source revealed.
Plans, according to sources, are to secure funding that would enable the CSC to buy cattle from farmers which would then be fed under a pen-feeding programme.
“We anticipate that we will be able to get back to that time when we exported beef to the European Union. We have the standards, we have the equipment to slaughter to international standards, and we have the market. We hope that we will be back in business very soon,” the source said.
At the attainment of independence in 1980, CSC was one of Zimbabwe’s major foreign currency earners as it exported thousands of tonnes of beef to the European Union.
Thirty-eight years down the line, the company has struggled to bring back the glory days.