Government is set to take over the majority shareholding to 51 percent in Cottco Holdings through a debt-equity swap as the company was failing to pay farmers.
Speaking during cabinet briefing yesterday Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said the scheme will allow the conversion of high interest debt of about $56 million plus using bad debt-buying unit Zamco, to lower interest Treasury Bills, thus easing the debt burden which has been straining operations of the company.
“Cabinet noted with concern the continued failure to pay farmers for cotton delivered to Cottco and has decided to institute measures to increase its shareholding in Cottco to at least 51 percent in tandem with its contribution in the company and apparent support to farmers and the need to spur rural industrialisation. To this effect, Government will be paying farmers directly,” she said
The government, through the National Social Security Authority (NSSA) already holds about 22 percent in the firm.
In a related development, Minister Mutsvangwa also said government will increase shareholding for Silo Foods Industry to 74 percent so as to guarantee the availability basic commodities in the country.