A HARARE textile firm, Paramount Garments (Pvt) Ltd, is finalising talks with troubled Bulawayo clothing concern — Archer Clothing Manufacturers (Pvt) Ltd — with a view of resuscitating operations of the Belmont-based company currently under provisional liquidation.
BY GAMMA MUDARIKIRI OWN CORRESPONDENT
Information obtained by our sister paper Southern Eye Business yesterday indicate that the Harare-based firm last year submitted a proposal on the takeover of Archer Clothing Manufacturers (Pvt) Ltd which was, however, rejected by the troubled firm’s creditors.
The Harare-based firm is, however, said to have revised and resubmitted the scheme of arrangement and is now awaiting a response from the creditors on a date to be announced by the court.
Paramount Garments (Pvt) Limited managing director Jeremy Yomans confirmed the development and said his company has revised and resubmitted the proposal for the possible takeover of the Bulawayo firm.
“The first schedule we submitted was rejected by the creditors and we had to resubmit another schedule. We are now waiting for the court to announce a date for a meeting with creditors for the consideration of our fresh proposal,” Yomans said.
Negotiations for the takeover of the troubled Bulawayo firm, which threw hundreds of workers onto the streets, started last year after the two textiles firms initially entered into a Cut Make Trim (CMT) deal.
Under the CMT deal, Paramount (Pvt) Ltd assisted with clothing material and labour while Archer Clothing chipped in with working space pending the liquidation process of the Bulawayo firm.
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Archer Clothing was laid low due to a myriad of problems, top among them a harsh economic environment and a liquidity crunch which has seen several local firms close or listed in critical condition.
The company was placed under judiciary management in 2010 after being seriously hit by shortage of working capital, obsolete machinery, power challenges and cheap imports which remain major constraints crippling viability of industries in Bulawayo.
In the same year, the clothing company scaled down operations, laying off 270 contract workers and 210 permanent employees.
The company is one of many entities wrecked by a decade of economic downturn.
As of July this year, at least 20 companies in the city had been put under judicial management while 10 others were facing liquidation.
The textile industry in Bulawayo is the hardest hit.
Some of the Bulawayo firms under judicial management include textile giant National Blankets, Tabs-Avon Lighting, Asmara, Belmont Leather, Textile Mills, Security Mills and Universal Component.
