PORT ELIZABETH - Eastern Cape MEC for Eastern Cape Rural Development and Agrarian Reform, Mlibo Qoboshiyane, is expected to visit the Magwa Tea Estate in Lusikisiki next month for the first harvest following four years of dormancy.
As part of the processes to rescue the province’s two tea estates, the provincial government resolved to issue an expression of interest call aimed at attracting the private sector to invest in the incorporated tea estate.
Majola tea estate was incorporated into the Magwa tea estate following a court process after workers resolved to join the two tea estates to form a single incorporated tea estate.
This year 100 percent of the Magwa tea estate ownership was transferred from the Eastern Cape Development Cooperation (ECDC) to the Department of Rural Development and Agrarian Reform (DRDAR) and a new shareholding structure was developed to attract private sector investors.
Qoboshiyane said the proposed new shareholding structure of the incorporated tea estate would give the private investor a controlling 51 percent shareholding, 26 percent to the community, 13 percent to the employees of the tea estate and government would hold a 10 percent shareholding.
"The private equity partner will be required to fund the 51 percent equity share by contributing 51 percent of the funding required in the approved business plan.
A lease agreement with the community in lieu of the 26 percent shareholding may also be considered in proposals.
He said stakeholders associated with the tea estate operations were being consulted and engaged on the process of the business rescue plan as well as on the long-term financial sustainability of the tea estate.
"The business rescue practitioner engaged workers, managers, and shop stewards of Magwa and Majola tea estates, traditional leaders, communal property associations and potential investors on the business rescue processes," he said.
Qoboshiyane said that provincial treasury committed to allocate R116 million for the tea estate rescue process to improve tea production on the incorporated tea estate.
"We invite private individuals or corporations interested in investing in tea production to respond to this expression of interest to commercialize tea production in the Eastern Cape so that we can contribute towards economic growth, create jobs and improve rural economy of the province," said Qoboshiyane.
- African News Agency (ANA)