TINASHE MAKICHI
Plans by an Indian health firm, Ajanta Pharma, to take over the operations of state-owned pharmaceutical company CAPS Holdings have hit a dead end following revelations that policy inconsistencies and rising factionalism weighed down negotiations. The Indian investor last year signed a letter of intent with government to take over CAPS Pharmaceuticals and revive its operations. Further, the company intended to set up a top-notch hospital and medical college to train health practitioners. Under the deal, Ajanta was supposed to inject $1 billion in under a year.
A well-placed source told Business Times that the lack of a defined industry policy, and inconsistency on existing policy, together with the current foreign currency challenges being faced by the country, saw Ajanta backtracking on negotiations to take over the firm.
Ajanta officials met Vice President Constantino Chiwenga when he visited India last year and Ajanta’s top officials including co-founder and vice chairman, Madhusudan Agrawal have since visited CAPS Pharmaceuticals to apCAPS takeover bid hits snag preciate its state.
Industry and Commerce Minister Mangaliso Ndhlovu confirmed that there had been no movement with regards to the Indian investor but government has been receiving further interest for the company from other investors.
“I have not been told of any progress with regards to the CAPS deal but all I can tell you is that there are some works being done at the company right now to make sure it comes back to operations. There has been some interest on the company from other investors but the focus at the moment is on making sure the company is operational.
“As you are aware the company needs massive capital injection and looking for investors will remain an option but on the deal with the Indian investor, it has been quiet,” said Ndhlovu.
The pharmaceutical manufacturer shut down its operations five years ago due to undercapitalisation, massive debts and allegations of management malfeasance.
At its peak, CAPS Holdings, which used to be owned by Fred Mtanda, used to manufacture 75 percent of essential drugs in the country and was once listed on the Zimbabwe Stock Exchange.
Government through the Reserve Bank of Zimbabwe has to date managed to settle outstanding debts with banks and other individual creditors
