Delta Dairies sale shrouded by secrecy
Isaac Pinielo | Friday October 10, 2014 16:15
Sigwele made this claim on Monday just after a High Court case in which 56 workers of Delta Dairies had approached the court seeking the reversal of the provisional liquidation that was placed on the company on 20 August 2014.
The workers themselves had applied for the company to be liquidated as they alleged that it was insolvent and it owed them outstanding salaries.
However, in a twist of developments, the workers approached the High Court this week seeking to stop the liquidation.
While judgment was reserved in the Monday court case, Sigwele immediately announced that he had struck a deal to buy back the company although he declined to reveal how much he paid for it.
On Monday Sigwele told BusinessWeek that he had managed to buy back the 98.5 percent equity of the company from the Citizen Entrepreneurship Authority (CEDA) making him the majority shareholder of Delta Dairies.
“Yes, it is true that I have bought back my company. As for more details about the funds involved you can talk to CEDA,” he said.
However, when contacted for comment, CEDA were equally secretive. They could neither confirm nor deny this development.
“It is our opinion that it would not be right or in our best interests to discuss Sigwele’s financial transactions in this forum. We feel it would be better to forward your questions to Dr Sigwele himself,” said CEDA communications manager, Leatile Bakwena, in an email response.
However, Nancy Kiggundu, attorney representing Delta Dairies has also confirmed that an agreement has been made between Sigwele and CEDA giving the former full control of the company.
She disclosed that CEDA had suggested a pay-off of P423 million.
“All I can tell you is that this transaction is still pending while awaiting the ruling of the court on whether the company should be liquidated or not,” she said.
Kiggundu however expressed hope that the court would reverse the liquidation since the workers who had sought for it have applied for its cancellation.
She noted that the move would be a wise decision to save the company which is the first citizen owned dairy company to be established in the country.
Meanwhile, the 56 workers indicated that their only concern was to receive their salaries. Delta Dairies has not been producing milk constantly since September last year, despite public procurement support.
This led to serious financial difficulties for the company, which now owes workers P661, 545 in unpaid May and June salaries. There have been reports that some three milk giants, including two South African companies, had registered their interest to buy the plant.