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Innscor Africa Limited investment case

Post the Restructure, in January 2018, Probrands disposed of its dairy assets to a newly incorporated company, Prodairy, a dairy and dairy products processor.”

The company has a long history of brushes with the law.

In 2013 Innscor Africa Limited was fined US$ 60 million for not following the proper procedures in its acquisition of majority shareholding in National Foods Limited in 2013. The CTC, after conduction investigations on the transaction, found that Innscor acted against regulations when it purchased a majority interest in National Foods.

Innscor Africa Limited as in its most recent run-in with CTC did not notify them of their intention to acquire a majority stake in National Foods Limited which is a contravention of the Competition Act.

Interestingly if the US$9 million which the company said it lost from the statutory surrender requirement is added back to the top-line revenue, it will take the company’s revenues for the 2021 financial year to just above US$ 24 million which would be higher than what it achieved in 2020. This policy position which the company lamented needs revision by the authorities as it is inflicting real financial harm to companies that are Zimbabwe’s biggest exporters and earners of foreign exchange.

In the 2021 financial year, Padenga Holdings Limited incurred higher interest expenses at US$ 10,138,637 which was up from US$ 6,665,084.00 the previous year. The increase in this cost category was due to leverage and borrowings which Padenga employed in rehabilitating the Eureka gold mine which is now in full production and is also responsible for the increase in group revenues.

The company enjoyed increased production from its gold mining operations. The company sold a staggering 976 kilograms of gold which was higher than the 722 kilograms of gold sold in 2020. The increase in gold production came from the newly commissioned Eureka gold mine. From its crocodile operations, Padenga Holdings Limited sold a total of 55,341 skins which was less than the 72,244 skins it sold in 2020. The Zimbabwe crocodile operation sold 39,936 skins down from 43,254 skins that it sold in 2020.

Other world markets followed suit documenting record lows across the board. On the Johannesburg Stock Exchange (JSE), Business Day reported that the worst losses around the same period were approximately ZAR3.3 trillion which was at that time around two-thirds of South Africa’s GDP.

“SA’s main stock index plunged almost 10% on Thursday (12th March 2020), the biggest drop since October 1997 when global markets were in the midst of the Asian financial crisis.”