Monday, October 26, 2020

Fabulous Flowers dragged to court to save it from extinction

Fabulous Flowers, the trail-blazing exotic flower export outfit in the country is expected to collapse into judicial administration in the next few weeks as angry creditors are clamouring for their millions which they have put into the company.

The company’s promoters include Tony Mill, Eddie Norman and his daughter and have a 28-hactre farm in the north-eastern outskirts of Gaborone. It is being forced into judicial administration by its financiers who are owed P 40 million, excluding interest on the loans.

“We are doing this to protect the company from other creditors. We could have sent the company against the wall but there is nothing that we can recover from the promoters. Our belief is that this project was over capitalized,” head of Venture Partners Botswana, Anthony Siwawa, said in an exclusive interview with The Sunday Standard.

Fabulous Flowers hit the headlines in 2005 when it organized a media tour of its operation after it received a 4 million Euro (P35 million by the then exchange rates) loan from the European Investment Bank and Nordic to start the first ever hi-tech flower growing company.

According to the detail and terms of the loan, it was to supply the local and regional countries with fresh flowers as well as to supply the European markets. But the company failed to meet the terms of the loan- exporting to the European market until it ran out of cash last year.

Fabulous Flowers is in the business of growing exotic flowers, such as marie clair (orange) red giant (red),akhito ( white), sweet akhito (light pink), poshpink (dark pink) ocean song (purple), sayanara (yellow) and eldarado (peach). But they produced mainly roses. Currently it is using only 2.5 hectares to plant flowers to export to South Africa in small quantities.

The Venture Partners Botswana injected P 5 million in September last year in exchange for a 35 percent stake in the company. Just a few weeks ago the company again showed some serious financial problems and Nordic countries angrily responded by serving a “notice of default on the loan”.

“ We entered into some negotiations with other creditors because no one of us was to gain anything by an execution. I don’t think we would even raise P 2 million from the sale of their property. We would end up being owed P 5 million and they in turn owed P 35 million excluding interest.

“We believe what we have here is an issue of management,” Siwawa said.
The judicial administration application launched by Venture Partners Botswana on behalf of other creditors following a forensic audit which showed that the company was over capitalized but had weak management and that promoters had turned the loan facility into casino jack-pot.

Further, the farm was attacked by red spider pets during the year which killed nearly half of the plants.

“We still believe that the project is viable and that is why we have applied for judicial administration. The farm is situated in an area which has the best soil for flowers and has one of the most advanced technologies which makes it withstand even the harsh whether conditions such as the one found in Botswana. The biggest challenge was the issue of management,” he added.

Among the things which will be done during judicial administration process will be shopping around for a proper management team for the ailing company, the structuring of the loan facility and to bring its balance-sheet to a position where it can be turned around. That means Norman and his daughter have remained with 64 percent stake in the company but they are expected to inject millions of pula to kick-start the company once the judicial administration process has been finalized. But the problem is that he has a long running history of failure in business dating back to the 1980s when he was still in the real estate business up to as recently as with The Keg- a restaurant franchise he had at RiverWalk.

As the creditors were gathering quotations from outstanding auditing firms for the purpose of launching an application with the High Court, the company’s Chief Executive Officer, Tony Mill, resigned and left the country.

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