HORIZON MAKES GOOD ON DEAL 01 Jul, 2017
Following amicable arrangements with the government, Horizon Plantation PLC, a subsidiary of MIDROC Investment Group, this week made payment in the amount of 174.5 million birr owed to the Ministry of Public Enterprises.
This payment is part of an unsettled 1.4 billion birr the company owed the government following the former’s purchase of business entities.
It is to be recalled that the then Privatization and Public Enterprises Supervising Agency sold off entities such as the Limu Coffee Plantation Development Enterprise (Limu), the Coffee Processing and Warehouse Enterprise, Horizon Addis Tyre and 36.7pc of the government’s share in Bebeqa Coffee Estate and Gojeb Agricultural Development.
Horizon originally bought the enterprises for a total of 2.03 billion birr. The arrangement was for Horizon to make a 35-percent down payment upfront, and pay off the balance within five years.
The Ethiopian Privatizing Agency was first established in 1994, and was later restructured as Privatization and Public Enterprises Supervising Agency (PPESA).Two years ago the agency was again restructured to assume a ministerial portfolio. Since its establishment, the office has managed to transfer close to 370 public enterprises to the private sector.
In its dealings with Horizon, problems arose with Horizon’s failure to pay the required money upon the transfer of the enterprises.
The company failed to settle payments that were supposed to be effected during the first year. In this respect, it did not pay with interest 376 million birr for Limu and 460 million birr for Bebeqa.
Accordingly, the agency brought a case before the Federal High Court two years ago accusing Horizon of breach of contract.
Last year, the eighth bench of the High Court ordered Horizon to pay the money. Upon the execution of the decision by the court, two options were on the table to collect the money.
One was for Horizon to pay the money in cash; and failing that, to auction off its property. At that time, Horizon was in financial difficulties and went with the auctioning option.
Later, the two parties reached an agreement that saved Horizon’s properties from the auction board. In return, Horizon agreed to effect payment of 1.4 billion birr by July 7, 2017.
As part of this agreement, Horizon had already paid 174.5 million birr for the transfer of the Coffee Processing and Warehouse Enterprise.
Following the settlement of the sale of the Coffee Processing and Warehouse Enterprise, the company is in the process of doing so for the remaining four entities, a source from the Ministry told The Reporter.