In an exclusive interview, Munyukwi said: "They (Ariston) had some holes in their documents and the Securities commission wanted more details.
"This is very unfortunate because for the first time we have a local company attracting foreign investment in the name of Afrifresh Holdings Limited from South Africa. Probably they should have done more research before rushing with the Rights Offer and to the public."
The Rights Offer, which was supposed to have been closed last month, will now only close on April 3, 2012 almost two months after the proposed date of the offering launch in Harare.
South Africa's Afrifresh Holdings (Private) Limited confirmed that it would inject much needed cash as well as underwriting the US$8 million Ariston Rights Offer.
Ariston is listed on the Zimbabwe Stock Exchange (ZSE) and last year made a US$2 million loss.
The blamed this on bad business operations mainly in its agricultural subsidiaries in the Eastern Highlands.
In a surprise move, however, the Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere, in Harare revealed that Ariston had just signed a Corporate Social Responsibility (CSR) with his ministry and the Government of Zimbabwe to empower the people in the region where Ariston operates and has its estates in the Manicaland Province.
"This should benefit the people in Nyanga," Kasukuwere said in an interview.
"We are very happy that Ariston has done this gesture of good and more corporates should do the same thing across the board."
The Ariston Board, currently led by prominent business personality and commercial farmer, Dr Robbie Mupawose, is proposing a US$8 million Rights Offer to recapitalise the company by way of a Renounceable Rights Offer of 888 888 889 ordinary shares.
The deal was approved by shareholders in Harare on Tuesday at Royal Harare Golf Club where the company held an Extraordinary General Meeting (EGM).
The agreement between Afrifresh and Ariston was signed on February 14 where Afrifresh agreed to underwrite the offer in compliance with ZSE requirements.
"In recent years the Zimbabwean economy has faced a shortage of long-term finance, making the farming of longer cycle crops uneconomical," Dr Mupawose said.
"This has resulted in Ariston under-supplying the market and becoming inefficient from a capacity utilisation perspective. Ariston struggled in the last few years due to capacity under-utilisation, expensive short-term financing, aged equipment and labour constaints which have led to a reduction in the quality of tea and other fruits and, therefore, lower returns.
"Without recapitalisation, the ability of the company to continue as a going concern is significantly doubtful."
Dr Mupawose said his Board had therefore decided to go for the Rights Offer and get new investors such as Afrifresh.
Listed on the ZSE in 1948, Ariston is an agri-industrial company operating five estates totaling 7, 864 hectares of land of which 3, 797 ha is arable land growing a wide variety of agricultural produce as well as supplying supermarkets with local and imported produce through its distribution company, FAVCO (Private) Limited.
The five estates are Southdown in Chipinge, which grows tea, and macadamia nuts, Clearwater in Chipinge, which grows tea and macadamia nuts, Roscommon in Chimanimani, which grows tea, macadamia nuts and bananas, Kent in Norton, operates poultry and livestock businesses and produces vegetables, and Claremont in Nyanga, which is a producer of pome and stone fruit, and is the largest producer of rainbow trout in Zimbabwe.
"FAVCO requires funding to enhance its trading performance," Dr Mupawose said.
"Significant value is expected to be unlocked if the company is capitalised to the right levels to enable it to expand business to ensure higher profitability."
Ariston reported a net loss of US$2 022 008 during the nine-month period ended September 25, 2009 and as at that date, the Group's total current liabilities exceeded total current assets by US$669 648.
"The ability of the Group to continue as a going concern is dependent on the entity obtaining financing and the implementation of effective operational strategies," said chartered accountants Deloitte and Touche International (Private) Limited in their report on the struggling ZSE-listed entity.Post published in: Business