Second wind for Golden Fruit

Mbongeni Mguni | Friday March 13, 2015 16:01

A new awakening for Golden Fruit Pty is on the horizon, after top Botswana Stock Exchange performer, Sefalana Holdings, posted the top bid of P4.3 million at a disposal auction held in Boatle yesterday morning.

Golden Fruit was mothballed in 2013 amid operational stress, with more than 100 workers losing their jobs. The 17-year-old company was wholly owned by the Botswana Development Corporation (BDC), which snapped it up from its founding citizen investors.

In an eastern wing of the now cobwebbed building, 18 bidders gathered for an opportunity to get their hands on the business.  SFB Auctions, the company engaged by BDC for the disposal, was under instruction to sell the structural properties and the equipment therein either together or separately.

The Mmegi newscrew present at the auction found that beyond the bidding room, state of the art equipment, including juicemakers and bottlemakers were in a state of frozen animation, left as they were on that day in March 2013 when the last worker switched the lights off and left.

Rolls of labelling paper with the proud ‘Golden Fruit’ insignia were tucked in one corner, while another room apparently used as a fridge, lay open for inspection by the potential buyers.

Speaking shortly after landing the highest bid, Sefalana executives said they were eager to clean up the now dusty facility and prepare it for a grand reopening.

“Our bid was P4.3 million for the plant and the equipment and it was accepted,” group managing director, Chandra Chauhan said, as he and his executives gave the facility another good look.

“We now await the BDC’s acceptance of our bid.” According to Chauhan, the diversified retail and industrial group plans to continue the juicemaking business at Golden Fruit, while bringing the significant benefits of its footprint to bear on operations.

“We have the retail outlets to push the product through,” he said.

“We need to clean up the plant, perhaps bring more machinery and start it up again.

“The sooner the BDC accepts the offer, the sooner we start preparatory work.”

The BDC’s acceptance of the offer is seen as academic as the parastatal had been eyeing a lower price for Golden Fruit.  According to the original auction documents, bids for the building (excluding) the equipment started at P3.7 million.

“We were hoping to achieve P4 million and above (being) P3 million and above for the building and P1 million and above for the movable assets such as plant, machinery and equipment,” said SFB Auctions managing director, Adam Van Aswegen.

“We are greatly satisfied with the level of attendance at the auction, especially given that we were essentially selling one product, this being a very specific product.”

The specificity of the equipment in particular, meant that buying the plant to strip and resell was an unlikely plan for bidders. According to one, the equipment “can only be used for making a specific type of juice” and no other.

“This is not like buying freezers and cash registers. While technically it was possible that someone could buy the equipment and take it off site, it was always likely that the winning bid would be someone who wants both the property and its assets,” said the bidder.

For the BDC, the sale of Golden Fruit marks another step in the parastatal’s plan to strategically shed part of its investment portfolio.

“Golden Fruit is being divested from by the corporation in line with our business remodelling programme – a large portion of which is to restructure the BDC balance sheet,” said Boitshwarelo Lebang, BDC Head – Marketing Communications.

“To this end, BDC will divest from approximately 12 percent of its portfolio of projects and shed some of its assets, which do not necessarily fit into the new strategy.

“BDC will ensure that the divestment activities follow the highest form of governance and are carried out in a fair and transparent manner.” For Sefalana, the latest acquisition adds to a growing portfolio that – in its retail sector – includes Namibia, a market that Golden Fruit used to service back in its hey days.