Lobels invest US$3,6 million on refurbishing

Lobels invest US$3,6 million on refurbishing
Published: 25 January 2012 (1446 Views)
Lobels Holdings will soon invest US$3,6 million on refurbishing and replacing its Harare and Bulawayo plants with a view to significantly ramp up production. The country's oldest bakery has reportedly set its sights on increasing daily production from 100 000 to 300 000 loaves by the end of this year.

Sources said the bread maker would refurbish the Harare factory to enhance efficiencies while the Bulawayo plant would be replaced with a new one.

"They will invest about US$3,6 million on refurbishing and replacing the plants. The Harare one will be refurbished but in Bulawayo they will replace it."

But it was not immediately clear where the money will be coming from considering the firm is battling to pay off millions of dollars owed to banks and creditors.

However, a consortium of local businessmen linked to the Confederation of Zimbabwe Industries is reportedly on the verge of taking over the firm.

Lobels Holdings resident director Retired Brigadier David Chiweza was not available for comment yesterday as his mobile phone went unanswered.

But informed sources last week told Herald Business that a consortium of local businessmen was closing in on a stake in the recuperating bread-making firm.

Sources in CZI would also not confirm the deal, but hinted some of its members were lining up to acquire Lobels and would make an announcement this week.

"We are not able to comment publicly at the moment, but an official statement would be released by Friday next week," said a high-profile source.

"It is difficult to comment on the deal at this moment as there are some caveats (cautions not to comment) on it."

Unconfirmed reports last year indicated Kayseed Trading, owned by a local consortium, invested an undisclosed amount to enable Lobels to resume production.

Lobels Holdings struck an agreement with trade creditors and banks last year to suspend the sale in execution of assets to allow time for the investor.

Its assets were transferred to Lobels 1 and capitalised as 98 percent debentures and 2 percent ordinary shares to be changed over in favour of trustees of debentures.

Lobels 2 would lease assets from Lobels 1, operationalise the equipment and raise funds to revive the business.

Lobels 2 will pay rentals to Lobels 1, which the latter would use to clear its multimillion-dollar liabilities to local financial institutions as well as creditors.

Assets in Lobels 1 form the security to debenture holders and are administered trustees (the advisors) and a proxy for creditors.

Lobels owes banks a total of US$14 million, which reportedly attracts between 15 percent and 45 percent interest and trade creditors about US$4 million.

In a bid to salvage its future, Lobels engaged leading financial advisors CBZ Bank and renowned lawyers Dube, Manikai and Hwacha to devise a framework to revive the firm.

 According to the Lobels revival framework, the amount owed to banks was converted to three (or other term) debentures to give Lobels some relief.

The firm has since resumed limited production and is operating on the basis of the concept framework devised by its advisors.

It planned to pay small creditors US$30 000 each while bigger creditors would be paid 30 percent of what they are owed.

- TH

Tags: Lobels,

You May Like These Videos


There are no comments.

Latest stories

How much power do politicians possess and who gives it to them?

by Erick Matotoba | 20 July 2018 | 89 Views

What now comrades 2?

by Tatenda Magumise | 20 July 2018 | 99 Views

Govt is not influencing Zec: Mnangagwa tells the elders

by Mafu Sithabile | 20 July 2018 | 133 Views

The role of the Church in this election

by Erick Matotoba | 20 July 2018 | 68 Views

BREAKING: Undenge sentenced to five years in jail

by Byo24News reporter | 20 July 2018 | 115 Views

Mnangagwa's govt pressures Zesa to pay Chivayo $52m

by Staff reporter | 20 July 2018 | 110 Views

Army responds to farmer eviction story

by Staff Writer. | 20 July 2018 | 88 Views

Mnangagwa's nasty fallout with cleric

by Staff reporter | 20 July 2018 | 86 Views

Mugabe's son-in-law pocketing obscene salary

by Staff reporter | 20 July 2018 | 110 Views

Chamisa should now rethink its strategy

by Faith Zaba | 20 July 2018 | 71 Views

Zimbabwe judges, generals and post-coup dynamics

by Andrew Kunambura | 20 July 2018 | 68 Views

Chiwenga 'betrays' Zanu-PF, reveals open secret

by Stephen Jakes | 20 July 2018 | 102 Views

Mohadi returns from SA

by Stephen Jakes | 20 July 2018 | 46 Views

Chamisa vs Democracy

by Anthony Mukondo | 20 July 2018 | 65 Views

Zimbabwe postal vote row fuels political tensions

by Staff reporter | 20 July 2018 | 74 Views

July 30 election: Not free, fair or credible

by Ibbo Mandaza & Tony Reeler | 20 July 2018 | 72 Views

Mnangagwa govt hunts for $2bn funding

by Staff reporter | 20 July 2018 | 81 Views

Chamisa popularity shoots up

by Staff reporter | 20 July 2018 | 87 Views

WATCH: Chamisa after meeting Annan

by Ndou Paul | 20 July 2018 | 93 Views

Wimbo's followers will remain Zanu-PF supporters

by Staff reporter | 20 July 2018 | 69 Views

Two Zimra officials acquitted

by Staff reporter | 20 July 2018 | 63 Views

WATCH: Chigumba is not resigning as ZEC chairwoman

by Staff reporter | 20 July 2018 | 75 Views

Zimbabwe: Politics of false hope.

by Collen Madziva | 20 July 2018 | 131 Views

G40 elements working with MDC Alliance to derail elections

by Lloyd Msipa | 20 July 2018 | 306 Views

Mutare ready for Mnangagwa's 2nd coming

by Staff reporter | 20 July 2018 | 141 Views

Chiwenga salutes Crocodile Gang member Ndangana

by Staff reporter | 20 July 2018 | 174 Views

Dr Thokozani Khupe MDC-T makes fresh demands to Zec

by Staff Reporter | 20 July 2018 | 221 Views

Zanu-PF's Pemhanayi steps aside for Madiro

by Staff reporter | 20 July 2018 | 119 Views

'Studying for the Grave'

by Staff reporter | 20 July 2018 | 137 Views

Bantu buys Mutare City Rovers

by Staff reporter | 20 July 2018 | 119 Views