THE government has issued treasury bills and a tax set-off to amortise its $34 million debt to SeedCo, the company’s chief executive said on Thursday.
Group chief executive Morgan Nzwere told analysts that SeedCo had received treasury bills worth $24 million and tax setoffs amounting to $5 million in part-payment for the $34 million it is owed by government.
“The government was owing us about $34 million, they gave us TBs worth about $24 million and they said the remaining, you can use it for tax setoffs and so on,” he said.
“To date we have done tax setoffs totalling about $5 million and the balance we are waiting for the next Annual Payment Dates to see if we can try and take advantage of the situation there.”
SeedCo reduced its loss for the six months to September by 40 percent to $7,6 million on lower costs and expects to conclude the sale of its majority stake in Quton by mid-December.
Despite revenue marginally declining to $16 million from $17 million due to subdued winter sales, overheads were 17 percent lower to $12,4 million. Finance charges improved by 46 percent owing to efforts to reduce debt and intensified debt collection.
Nzwere said the company is expecting to receive the second tranche of $27 million from new foreign equity partners Limagrain next month.
He said while the company has sufficient stocks to meet local demand, plans are underway to increase its seed output to satisfy regional uptake.
Going forward, Nzwere said the company is exploring the Uganda market and sees growth in Nigeria, driven by political stability in the north and central parts of the country.
He said the sale of the stake in Quton will reduce the group’s risk in the underperforming cotton industry.
Indian firm Mahyhco will take up 60 percent in Quton for $10 million, in a move the company said would cushion it from pressures being experienced by the sector.
This comes at a time most key players in the cotton industry are struggling to remain afloat due to structural issues in the sector.
“It’s really an industry (cotton industry) that is going through some pains at the moment and we think our strategy to try and bring in a partner will reduce our risk and is the correct strategy,” said Nzwere.Advertisement