Kolosus and Senwes move to bury the hatchet
One of the main obstacles to the viability of the South African meat and leather processor, Kolosus Holdings, would appear to have been removed following the company’s announcement that has resolved its long running dispute with the
Dating back to the mid 1990s, the disagreement was centred on Kolosus’ sale of its Silveroak subsidiary (see leatherbiz.com news page search facility for related stories), and culminated in the company being instructed to pay the liquidators of Silveroak R88 million ($11.5 million) in February this year.
Underwritten by the German investor Claas Daun, the settlement gives Seton a passive 25% stake in Kolusus and $5 million in cash. It also includes a ‘put’ option which gives the company the right to exchange its shares with Daun at any time, for $1 million. As a result, the R88 million action against Kolosus has been dropped.
Subject to the approval South African Competition Board, Daun is expected to acquire the majority of Kolusus’ shares from its two main shareholders of Senwes and Absa ,within the next three months, having already taken over Kolosus' debt from a consortium of four banks.
In announcing the agreement, Kolosus added there would be a capital restructuring, possibly in the form of a rights issue. This will be used to fund the settlement and the company's other capital requirements.
