Another blow for Bulawayo

Another blow for Bulawayo
Published: 12 June 2019 (214 Views)
BULAWAYO textile manufacturing firm, National Blankets (Pvt) Limited, has been liquidated following years of poor performance and failure to find a good investment suitor in yet another blow to the city's industrial revival drive.

Bulawayo High Court Judge Justice Nokuthula Moyo issued an interim order directing National Blankets to be placed under liquidation after she was satisfied that the company could not continue operating normally due to serious financial constraints it is facing.

"It is ordered that the applicant National Blankets (Pvt) Limited is provisionally wound up, pending the grant of an order referred to or the discharge of this order. Subject to subsection 27 (1) of the Companies Act, Phillip Ndlovu of PNA Chartered Accountants is appointed provisional liquidator," ruled the judge.

Justice Moyo ordered any interested parties to appear before the court sitting tomorrow (Thursday) to prove why the granting of a final order to place the company under full liquidation should not proceed.

The company's products have been experiencing a drastic fall in demand as the market for woven blankets declined. The liquidator is expecting to facilitate the purchase of the company by a potential investor or the disposal of assets.

In papers before the court, National Blankets said it resolved to seek an equity investor, Triumphant Enterprises, to partner as a potential investor.

After an agreement was reached, Triumphant Enterprises purchased modern machinery from Europe, providing access to foreign currency with which to acquire raw materials.

"Following the acquisition of new machinery and access to foreign currency, production improved with capacity utilisation rising from about seven percent to 65 percent," read court papers.

However, the company later faced challenges associated with loan repayments, prohibitive borrowing costs, labour costs and the general decline in market due to competition from foreign products.

The company said a loan of US$1,2 million, which was long term, was recalled with the result that capital, which would have been available to retool and purchase raw materials, was used to retire the loan, depleting working capital.

National Blankets said the slow uptake of its products also resulted in the company failing to service loans advanced to it by financial institutions and the major shareholder, Triumphant Enterprises.

"The company's business has failed and it is insolvent with its liabilities exceeding its assets by an appreciable margin such that it would be reckless not to contain the downward slide," said the company.

During its peak, National Blankets was arguably a market leader in the blanket manufacturing business enjoying a 70 percent domestic market share.

The company was also a major exporter of textile products to the Sadc region. The company, among the second city's most iconic and oldest, still uses equipment that was first installed in 1940, early into the Second World War and can only manufacture woven blankets.

National Blankets appeared to be on its way out of the woods when in 2014, creditors agreed that all debt be converted to equity at a rate of $0,50 per ordinary share.

The creditors, however, were not keen on putting new money into the company, which had a history of borrowing heavily. National Blankets has been under judicial management since 2012 due to viability concerns.

It received a $500 000 loan facility from the Central African Building Society (CABS) under the Distressed and Marginalised Areas Fund (Dimaf) in 2013 but the money failed to change its fortunes.

Also in 2013, the firm sold off some of its property to pension fund, the National Social Security Authority (NSSA) and settled its debt to the bank and service providers such as Bulawayo City Council, paying a combined total of $2.6 million.

- chroncile

Tags: Bulawayo, Blow, Company,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Zimbabwe's success inevitable, says Mnangagwa

by Staff reporter | 15 September 2019 | 158 Views

Mugabe died a sad man

by newzimbabwe | 15 September 2019 | 183 Views

Zinara looters put on notice

by Staff reporter | 15 September 2019 | 156 Views

Ramaphosa apologises for xenophobia

by Staff reporter | 15 September 2019 | 111 Views

Mugabe funeral programme shifts to Zvimba

by Staff reporter | 15 September 2019 | 197 Views

Zimbabwe nears SA industry loans deal

by Staff reporter | 15 September 2019 | 116 Views

Crafty Bob is not just history but our history

by Bishop Lazi | 15 September 2019 | 121 Views

G40's ahistorical narrative

by Ranga Mataire | 15 September 2019 | 110 Views

A too-comfortable end for Mugabe

by Jason L Riley | 15 September 2019 | 133 Views

Mnangagwa may not revenge against Grace Mugabe

by newzimbabwe | 15 September 2019 | 106 Views

Final salute for Robert Mugabe

by Staff reporter | 15 September 2019 | 75 Views

'The West is upset about Zimbabwean land'

by Prof Arthur Mutambara | 15 September 2019 | 125 Views

South Africans need a history lesson

by Mtandazo Dube | 15 September 2019 | 116 Views

'Foreigners can now invest in Zimbabwe's restricted sectors'

by Staff reporter | 15 September 2019 | 131 Views

Grace Mugabe praised

by Staff reporter | 15 September 2019 | 115 Views

Zesa, BCC agree on compensation for power station use

by Staff reporter | 15 September 2019 | 105 Views

The 'Zimbabwean' mogul in SA police's crosshairs

by Staff reporter | 15 September 2019 | 138 Views

Can Bosso stand Colliery heat?

by Staff reporter | 15 September 2019 | 82 Views

ZB Bank introduces WhatsApp banking

by Staff reporter | 15 September 2019 | 76 Views

Sables beat Zambia, win Victoria Cup

by Staff reporter | 15 September 2019 | 61 Views

College charges extra on EcoCash

by Staff reporter | 15 September 2019 | 37 Views

Concern over sharp increase in armed robbery cases

by Staff reportetr | 15 September 2019 | 42 Views

'18 people living in one room'

by Staff reporter | 15 September 2019 | 58 Views

Zimbabwe stuck with expired medical drugs, says committee

by Staff reporter | 15 September 2019 | 46 Views

Mugabe: The socio-genesis, posterity of Pan-Africanism

by Richard Runyararo Mahomva | 15 September 2019 | 99 Views

Bulawayo City Council workers demand housing stands

by Staff reporter | 15 September 2019 | 30 Views

The installation of the Lozwi King at Emawabeni

by Pathisa Nyathi | 15 September 2019 | 98 Views

Graca Machel: Appreciate Mugabe's role in Zimbabwe

by Staff reporter | 15 September 2019 | 37 Views

Gukurahundi victims react to Mugabe death

by Staff reporter | 15 September 2019 | 39 Views

The other side of Mugabe

by Nqaba Matshazi | 15 September 2019 | 68 Views

Did Mugabe propose to marry Barack Obama?

by Staff reporter | 15 September 2019 | 39 Views

Cop jailed for shooting suspect

by Stafg reporter | 15 September 2019 | 40 Views

Stop mourning Mugabe, family says

by Staff reporter | 15 September 2019 | 53 Views

Robert Mugabe: Lessons to be learnt

by Kenneth Mufuka | 15 September 2019 | 77 Views

Inside the fight over Robert Mugabe's body

by Staff reporter | 15 September 2019 | 42 Views

'Mugabe was unrepentant'

by Staff reporter | 15 September 2019 | 37 Views

Mnangagwa's police refuse to charge Mutodi with hate crimes

by Staff reporter | 15 September 2019 | 46 Views

Jealous hubby kills neighbour

by Staff reporter | 15 September 2019 | 48 Views