Government is set to take over the majority shareholding in Cottco Holdings through a debt-equity swap, sources familiar with the scheme said. The scheme will allow the conversion of high interest debt of about $56 million plus using bad debt-buying unit Zamco, to lower interest Treasury Bills, thus easing the debt burden which has been straining operations of the company.
The Government, through the National Social Security Authority already holds about 22 percent in the firm. Cottco applied for provisional judicial management in November last year but suspended the move after the company and creditors, mainly banks, agreed for a scheme which would have resulted in debt-equity swap.
“The plan is for the Government to assume Cottco’s debt and become majority shareholder in the company,” said one source. “Being the majority shareholders, Government will recapitalise the business.” ∞∞∞∞∞ MORE »»»»