The Sunday Mail
THREE suitors are positioning themselves to take over Lobel’s Holdings after the bread maker completed a stunning recovery that saw it repay US$14 million it owed to CBZ, Met Bank, FBC Bank and NMB. It is widely expected that the four banks, which temporarily converted their debt into equity under a five-year plan to resuscitate the baker, will eventually divest to concentrate on their core business. Just six years ago, Lobel’s was on the brink of collapse as creditors besieged the company.
Now, sources at Lobel’s say the bread-making company has made significant strides towards settling its debt. “We have settled our debts; we are just waiting for the way forward from major shareholders since we had a five-year agreement (with them).
“A meeting, which will map the way forward, has been scheduled with current and former shareholders. If you talk to CBZ, the major shareholders, they will give a clear position on the matter,” said the source, adding there were three companies that were interested in taking over the business.
The identity of the investors could not be established at the time of going to print. “Negotiations on terms and conditions of the investment have now started in earnest and indications are that the investors are satisfied with what they have seen and the potential of the company.
“This deal will not take long to be finalised as stringent verification procedures have already been dealt with,” added the source.
CBZ corporate affairs executive Mrs Laura Gwatiringa referred all questions to the Lobel’s management team, who remained mum about developments.
Presently, Lobel’s has the capacity to produce 300 000 loaves a day.
As part of its growth strategy, the company introduced retail outlets that sell bread and confectionery across Harare. Erratic power supplies and the high cost of utilities and labour are, however, hampering revival efforts.
While costs have risen since 2009, the price of bread has been stagnant.
Lobel’s was owned by Ceuvost Services, a consortium comprising former FBC Holdings Limited chief executive officer Mr Livingstone Gwata, the banking group’s chair Mr Herbert Nkala, CAPS Holdings chair Mr Freddy Mtanda and Mr David Chiweza.
The four held about 25 percent shareholding each in the company.
It is understood Mr Mtanda is no longer interested in being a shareholder.
Indigenous investors gained a foothold in the business when the previous owners, the Lobel family, sold their stake at the turn of the millennium.
However, at the height of the country’s economic challenges the business suffered.
Key highlights
June 2008: Flour runs out at Lobel’s and company operations director Mr Cydwell Chitehwe appeals to the Grain Marketing Board and the Industry and Trade Ministry to help address the situation. Mr Chitehwe also implores the National Incomes and Pricing Commission to review bread prices. Lobel’s needs 90 tonnes of flour a day to resume 24-hour production. Over 1 200 workers were sent on forced leave as Lobel’s contemplates retrenchment.
Sept 2010: CEO Dr Burombo Mudumo resigns unceremoniously; Mr Tinotenda Chimhashu appointed acting CEO. Indications are a preliminary report prepared by Calmesa shows Lobel’s was prejudiced of US$7,6 million, siphoned through fictitious companies linked to management
Oct 2010: Lobel’s seizes shares worth between US$2,5 million and US$3 million from ex-CEO Dr Mudumo.
March 2011: Company resumes production.
May 2011: Venture Petroleum takes Lobel’s to court over a US$57 000 fuel debt. Operations temporarily suspended from June 7, 2011 to July 4, 2011, to conclude restructuring.
July 2011: NMB sues Lobel’s over US$4,3 million debt. Starts discussions with creditors and courts suitors to rescue the company. CBZ appointed financial advisor, with Dube and Manikai Hwacha as legal advisors.
Aug 2011: Lobel’s reopens.
Jan 2011: High Court-sanctioned auction of assets by NSSA to recover US$600 000 for statutory obligations stopped as parties agree to negotiate.
Sept 2012: Mr Mtanda sells 25 percent stake. Five banks take over Lobel’s.
Dec 2012: Lobel’s resumes Harare operations after recapitalisation.
Jan 2013: Lobel’s acquires US$2,5 million bread-making equipment.
