No milk for 300,000 pupils, again
Monkagedi Gaothobogwe | Monday August 11, 2014 11:17
The lucrative tender was won in February, for the whole of 2014, but the company has failed to deliver even a single carton of milk to schools. A few months ago it went down under, leaving 300,000 pupils across the country with no milk. The first supplies from the new tender were due to start in April, being a tender for the supply of P25 million worth of milk to the schools.
The Monitor can reveal that primary school pupils had their last supply of milk in March this year, as government stores emptied their remaining stock in anticipation of fresh supplies from Delta Dairies.
The Hold Up, Plant Needs P14 million To Start Production
Investigations by The Monitor reveal that the milk plant need an injection of P14 million to start production. It owes local and external raw material suppliers around P10 million and they are not willing to budge until the company coughs up money. Meanwhile, the majority shareholders, CEDA who own a 98.5% stake, has made it clear to the company management that they won’t bail it out. This point was also revealed in court papers pertaining to a case in which staff members at Delta Dairies are suing the company for unpaid wages. CEDA spokesman Leatile Bakqwena on Friday refused to comment promising to provide a written response which he had still not supplied at the time of going to print. The company’s managing director was said to be out of the country on Friday when The Monitor team made an effort to interview him.
Milk Plant Owes Banks Over P30 million
The Monitor has unearthed that despite lucrative support from government worth over P300 million since the milk plant opened in 2009, Delta Dairies currently owes local banks in excess of P30 million. In fact impeccable sources have shown The Monitor that since the milk plant closed in April this year, the second shut down in two years, Delta Dairies has been accumulating P850,000 a month in interest charges for their unpaid loans at local banks. This has to date totaled a whopping P3.4 million.
Unpaid Workers Auction The Milk Plant
On August 4, all 56 Delta Dairies staff, were awarded a court order by the Industrial Court to auction the company and pay themselves, after they went for three months without pay. A copy of the court order was sent to CEDA, the majority shareholder, while auctioning by the deputy sheriff is expected to take place in two weeks time. The workers are owed over P661,000 in salaries for May, June and July. It is feared that the workers’ court action could trigger a series of court orders as more creditors seek to auction the company to salvage the funds they invested in the company.
CEDA Refuses To Fund Delta Dairies Operations
Although a presentation was made to he CEDA board showing that selling an operational business can raise its value during a possible sale, while a non operational business risked being under priced, in May, CEDA advised management to sell the company but have been reluctant to buy into this view, The Monitor can reveal. Since the move to sell the company took off in April, four offers were made by companies from South Africa and Botswana.
CEDA Board Favours Citizen Promoters
The Monitor investigations have also revealed that the CEDA board have grown sympathetic to the original Motswana owner of the business, Howard Sigwele and his Zimbabwean partner John O’Rahilly who have indicated they are desperate to buy back their majority shareholding. Currently, Sigwele and O’Rahilly’s shareholdings have been diluted to less than 0.5 percent. Sigwele still sits on the board of Delta Dairies as one of the directors. However, since CEDA indicated in April that they want the company sold, their preferred duo are yet to raise the required funds for the takeover. Sigwele and O’Rahilly’s interest in the company they have failed to run successfully begs the question, what magic are they bringing this time? Sigwele could not be reached on both his mobile phones on Friday. A brief SMS enquiry from The Monitor on Friday was not responded to either.
CEDA’s Capacity To Handle Sale of the Plant Questioned
CEDA’s capacity to handle the sale of the company has come under scrutiny as they failed to respond to four offers that have been on the table for five months. The Monitor’s investigations reveal that board meetings concerning the sale of the company are never honoured and that CEDA has failed to present a timeline of actions detailing when they want the sale of the milk plant completed. Court papers in the just concluded matter between Delta Dairies and unpaid staff reveal that the board of the company is seemingly playing mickey mouse games.
The affidavit of the plant technician Tirelo Danga revealed that members have failed to attend a series of board meetings since the P68 million tender was awarded. According to the affidavit, none of the board members even responded to the series of meetings. They would not even respond to text messages or take repetitive phone calls from the company MD, Herman de Lange.