CFI Holdings retrenches workers
AGRO-Industrial group CFI Holdings has retrenched workers in its poultry division saying it will recall some of them as and when they are needed, Sunday News Business has learnt.
Although company officials in Harare could not give the exact number of people who have been retrenched, sources said the entire poultry section had been laid off.
“The Harare plant had 116 permanent employees excluding managers but in this case even the managing director received a termination letter so he has to sign a new contract. In Bulawayo there are 25 workers including the regional manager who also received his letter of termination. Just a handful were recalled in Bulawayo and had to sign new contracts,” said the source.
The Sunday News Business is in possession of one of the retrenchment letters given to Agrifoods workers signed by Mr Elisha Rubeni, the salaries and administration manager which reads that they were no longer needed at the company.
“Please be advised that due to insurmountable operational challenges, we have been forced to restructure the business in order to survive and return to viability. As a result of this restructuring exercise, you are hereby informed that your services are no longer required effective from 20 July 2016,” the letter reads.
The company said they were undergoing a restructuring exercise that has pushed them to retrench members of staff in that section. CFI Holdings board acting chair Mrs Grace Muradzikwa confirmed that the group has embarked on a restructuring process. She said since March, the group has implemented various reforms with a view to focus on operations at the same rationalising its cost structures.
“Further retrenchments were undertaken for the two milling businesses: Victoria Foods and Agrifoods in an effort to align the overheads to volumes projected in the short to medium term,” said Mrs Muradzikwa.
She said the board was cognisant of the debt overhang which emanated from continued trading at sub-optimal level and would like the recapitalisation process to balance the need to address the company’s debts and the need to provide trading capital for immediate recovery of these entities. The board is therefore working on restructuring the group and immediately followed by capital injection in a manner and structure that will ensure all stakeholders are protected,” said Mrs Muradzikwa.
The group expects to announce conclusion of its restructuring and recapitalisation plans before the end of the fourth quarter.
CFI Holdings was suspended from the Zimbabwe Stock Exchange in January this year due to insolvency. In October 2016, the group concluded a debt compromise and settlement agreement with local banks who were owed $16 million.
This has resulted in the group debt declining. This development has left the group with bank borrowings of $5,8 million, which the group expects to reduce to $4,6 million on the back of another land for debt swap which was expected to be completed by end of July. Last year it swapped its 834-hectare Langford Estate in Harare for the cancellation of a $16 million debt to Fidelity Life.