Govt eyes controlling stake in Cottco
BUSINESS REPORTER
Government is in discussions with shareholders as it seeks to acquire a controlling stake in Cottco Holdings Limited, the company has said.
The disclosure, in a cautionary statement, comes after the government facilitated the restructuring of Cottco’s debt through the Zimbabwe Asset Management Company.
Cottco applied for a voluntary suspension of the trading of its shares on the Zimbabwe Stock Exchange in 2014 after failing to settle debts amounting to around US$56m following its failure to recover the costs of inputs supplied to contracted cotton farmers due to massive side marketing.
The government moved in, announcing a Presidential Inputs Scheme which introduced a cotton subsidy scheme in terms of which ZWL$1.5bn and ZWL$2.5bn were committed in
2020 and 2021 respectively.
Last year, Information minister Monica Mutsvangwa told a post-Cabinet briefing that the government believes the move to take over the majority shareholding in the troubled entity would be a major step towards reviving Zimbabwe’s cotton sector.
“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% in tandem with its contribution in the company and apparent support to farmers and the need to spur rural industrialisation. To this effect, the Government will be paying farmers directly,” Mutsvangwa said.