Nutritional Holdings says Alvero to assist subsidiary Ukusela resume production
Durban-based Nutritional Holdings has taken on an unknown company, Alvero, to save its “ultimate immune-booster” deal negotiated by its cannabis subsidiary Ukusekela. The troubled group, whose shares are suspended on the JSE, issued a statement on SENS on 13 May 2022 advising shareholders that the board has “started negotiations with Alvero in order to finalise the regulatory aspects of the SAHPRA licensing requirements in order for the production to continue at Ukusekela” and these “negotiations and administration work are expected to be completed before the end May 2022”.
There appear to be two Alvero companies formed in South Africa – one in Wynberg and one in Limpopo – but both appear to have been deregistered. There is a Belgian-registered company Alvero, which specialises in technical consultancy, but Cannabiz Africa has not been able to establish whether this is Nutritional Holding’s new connection.
No further details have been released as to who Alvero’s principal is or any information about the company. According to a report in Business Day on 15 May 2022,
Ukusekela apparently holds an offtake agreement with one of the largest cannabis pharmaceutical companies based in Europe, which has a licence to distribute CBD oils and infused products in more than 15 countries.
Nutritional Holdings said earlier this month that Ukusekela was core to its strategy going forward but that its operations were on hold “pending the renewal of requisite licenses which had lapsed. Other opportunities and licences in this area are being investigated”.
The company has been light on detail. There is also no public information about the nature of ‘immune booster’ or its cannabinoid profile or its actual efficacy, an issue that has troubled shareholders who are now locked in for at least another six months while the group reposts its results and attempts to be relisted.
Initial immune-booster deal was done from Lesotho, now Ukusekela switching to SA
Business Day did not name the Ukusekela’s European connection. However, Cannabiz Africa understands that the initial offtake agreement Ukusekela negotiated was with German company, GIH Distributors, to be supplied by Ukusekela’s operation in Lesotho, with no mention being made of supply from South Africa. This all appears set to change with Alvera who’s job it is to get production going as soon as possible.
According to a cautionary notice to shareholders on 11 May 2021, the group said Ukusekela had concluded a R1.26 billion three-year contract with GIH Distributors for the supply of its “immune booster product” to Germany. In terms of the deal it would supply 50 000 units a month to GIH increasing to 200 000 units a month by year three. The contract was meant to have started at the beginning of January 2021 but was derailed by the Covid-19 pandemic. At that stage Nutritional Holdings had a licensed cultivation facility in Lesotho. However, that appears to have fallen through and Avero’s job will be to get a licensed South African operation up and running.
Crypto-currency dabble created chaos for Nutritional Holdings
Soon after the statement, things went badly wrong. Nutritional Holdings’ initially dabbled in crypto-currency to fund Ukusekela early last year , but that soon turned into a debacle leading to its suspension from the JSE, an investigation by the exchange and the resignation of director Nikhyle Dasarath in May 2021. The group hit further hardships in November last year with further resignations and late financial reporting.
Company promises to JSE to clean up its act, just needs more time
This year its promised to clean up its act and has asked the JSE for more time to pull together proper financials after the sale of its food division collapsed and investors put in formal complaints.
Business Day’s Michelle Gumede wrote of Nutritional Holdings on 13 May 2022 that: “Amid a string of hiccups, the Durban-based company — previously known for manufacturing dry food products such as soya mince, milk powder and instant porridge — was granted some relief last month when it managed to convince previous sponsor AcaciaCap to come on board in the short term. This was after the JSE warned that it was considering terminating its listing if it did not find a legally required sponsor. A sponsor helps companies comply with the financial requirements of being listed on the JSE”.
Earlier this month the company announced a board restructure that saw seasoned businessman Cobus Kotze being appointed. Kotze was founder of sports investment company SAIL which was subsequently listed before being taken over by Remgro. Kotze also managed Remgro’s investment in the South African television channel eTV. He also was involved in the start-up and financing of Circle Capital and assisted in the Mediclinic and Capitec BEE transactions, before getting involved in the telecoms sector in the USA.
Nutritional Holdings says it “continues to engage with the JSE on the consideration of the termination of its listing. Accordingly, this process is ongoing. Bi-weekly update reports will be sent to the JSE against the roadmap. The finalisation of the audited group results is the key focus of the company at present”.