DW in crucial meeting

21 Jun, 2019 - 00:06 0 Views
DW in crucial meeting David Whitehead is Zimbabwe’s largest textile company

eBusiness Weekly

Martin Kadzere
David Whitehead (DW) will next week hold two crucial meetings were shareholders and creditors will consider a scheme of arrangement designed to revive the company.

This follows the recent takeover of the former textile giant by Agri Value Chain of Zimbabwe (AVCZ), which acquired 51 percent–breaking an eight year-long hunt for the investor.

AVCZ, with various business locally and abroad has since revealed immediate plans to invest millions of US dollars in the textile company, which at peak directly employed nearly 3 000 people at its factories in Chegutu, Kadoma and Gweru.

In a notice to shareholders and creditors this week, judicial manager Knowledge Hofisi, said the meetings, to be held on June 27 and 28, were meant to present an update on the resuscitation of the company, presentation of financial statements as well as consideration of the implementation of a scheme of arrangement.

“These are statutory meetings, which will define the path that David Whitehead will take as we embark on the business of turning it around,” Hofisi told Business Weekly.

The shareholding acquired by AVCZ was previously owned by Elgate Holdings, which lost its 51 percent after failing to fully pay for the stake more than a decade after signing a share subscription agreement with DW. The agreement was terminated early last month on the basis of “non-performance” by Elgate after the High Court ruled the concession for the purchase of the shares be revoked.

In terms of section 30 of the company’s articles association, “any shares forfeited shall be deemed to be the property of the company, and the directors, may sell, re-allot or otherwise dispose of the same in such a manner they think fit.”

Meanwhile, DW has repaid $2,1 million loan it borrowed from the Zimbabwe Asset Management Company, an assets firm owned by the Reserve Bank of Zimbabwe.

The heavily-indebted company has been struggling with capital, prompting the central bank, through its asset firm step in with $2,1 million bailout last year to drive the turnaround. However, the funds were “too little” to support the turnaround of the company.

Formerly owned by Lonrho plc before a management buyout in 2001, led by former CEO Edwin Chimanye, the firm is a big player in the textile industry.

The company used to produce about 20 million metres of fabric per year while directly employing 3 000 workers and thousands in down and upstream industries.

The Zimbabwean government has been supporting cotton production in the past three years, helping output to increase to 142 000 tonnes last year from 28 000 tonnes. Analysts say beneficiation, supported by reviving the textile industry will have a multiplier effect on so many dimensions including employment creation.

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