TSL secures potential buyer for Cut Rag

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Business Writer
Tsl Limited says it has secured a potential buyer for its associate company Cut Rag Processors Private Limited, but management remains cautious on concluding the deal.

The impending sale of Cut Rag, where TSL holds a 30 percent stake, is contained in the company’s annual report where the group says “the sale of this investment is anticipated to be concluded before the end of the 2018 financial year.

“A potential buyer has now been secured and negotiations are at an advanced stage,” said TSL.

Group chief finance officer Derek O. Odoteye was however cautious on the deal, telling Business Weekly that similar negotiations had collapsed at the last hurdle.

“If you look even at our stake in Nampak, we have had situations where you get three potential buyers, but then the deals don’t materialise. So we are a bit cautious. Hopefully it will go through before the end of the financial year,” he said.

Cut Rag, which was valued at $2 million in October 2017, has been available for sale since November 2014.

TSL said the completion of the disposal was delayed since management of Cut Rag had opted for a managed liquidation process which has now been completed.

TSL also plans to offload its 16,53 percent stake in Nampak but has also been failing to pin down buyers. The stake was valued at $10 million in 2017, up from a $6,9 million valuation in $6,9 million.

Odoteye said the two are up for sale because they do not fit into the Group’s core businesses.

However both Nampak Zimbabwe and Cut Rag investments remain profitable.

Meanwhile TSL has continued with its plans to develop Vorstermans property with phase one having been completed while phase two plans are being progressed.

The group is also working on plans to upgrade its key properties.

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