CSC in bid to stop property sales
Mashudu Netsianda Senior Court Reporter
THE Cold Storage Company (CSC) has filed a court application seeking to stop the sale of its properties that were attached by the Sheriff of the High Court over outstanding employees’ wages saying the loss of the assets would scuttle talks with potential investors. The company through its lawyers, T Hara and Partners, filed a chamber application seeking the suspension of the sale of four pieces of land in Bulawayo, Beitbridge and Mberengwa under a writ of execution.
The parastatal said it has a turn-around strategy that could be consummated by end of November that is anchored on public-private partnerships and CSC’s contributions to the proposed ventures are its assets and infrastructure which include the attached properties.
The immovable properties that were attached include a Stand Number 220 in Beitbridge measuring 2,859 square metres, Stand Number 11970 in Ilanda suburb, Bulawayo measuring 1,683 square metres; stand Number 8195a along Matopos Road in Bulawayo measuring 2,156 square metres, Stand Number 17A Caitness Road, Hillside in Bulawayo measuring 9,652 square metres; Kromdraai Estate measuring 4,451,4605 hectares in Mberengwa district.
The value of the properties was not stated. The attachment of the properties follows last year’s registration at the High Court of an arbitral award to workers amounting to more than $450,000 in outstanding wages after the CSC failed to honour a consent arbitral award.
In terms of the consent arbitral award, CSC and the employees had agreed that the total amount owed to workers as of April 2013 was $453,110. According to court papers, CSC was to pay employees $30,000 per month effective October 2013. In the court papers filed yesterday, CSC is the applicant while workers’ committee chairman, Jacob Mafusire, and the Sheriff of the High Court were cited as respondents.
Reuben Chagwinya, the CSC’s administration manager, in his founding affidavit sought the suspension or postponement of execution, arguing that his organisation was in the process of engaging investors to provide working capital to enable it to redeem its debts.
“This is an application to seek postponement or suspension of the sale on execution of CSC properties attached by the Sheriff. CSC in conjunction with the government of Zimbabwe has crafted a turnaround plan which is in the process of unfolding. The plan is premised on the public-private partnership which will see CSC engaging investors,” said Chagwinya.
He said the sale of the attached property will impact negatively on the parastatal’s proposed turnaround strategy as it was likely to lead to the total collapse of the company.
“CSC’s contributions to the public-private partnership are its assets and infrastructure which include the attached properties. The sale of the attached properties will scare away potential investors and derail progress made,” said Chagwinya. He said the implementation of the turnaround plan was at an advanced stage.
“The forensic audit that will usher in the implementation of the plan will be completed no later than the end of November 2015. It is against this background that CSC humbly prays for postponement or suspension of the sale in execution until the turnaround plan bears fruits not later than March 31, 2016.”
The respondents are yet to file opposing papers.
Early this month, Bulawayo City Council dragged CSC to court over a debt of more than $335,000 in unpaid rates and water charges. The debt was accrued over a six-year period. CSC is struggling to remain afloat and is reportedly clinging to one abattoir and 700 cattle. The company’s fortunes have been blighted by allegations of mismanagement, corruption and heightened competition from private abattoirs.
Over the years, CSC has been involved in negotiations with potential suitors willing to operationalise its depots in Masvingo, Kadoma, Marondera and Chinhoyi, but analysts say the $22 million debt overhang has been a major put-off for investors. In all, it is estimated that more than $80 million is needed to bring the company back to its feet.