TEXTILE company, Merlin, has roped in FBC Securities and CBZ Bank in a bid to secure a credible investor to pour in $1,2 million working capital, papers from the office of the judicial manager reveal.
BY MTHANDAZO NYONI
Merlin was placed under provisional judicial management in 2011, after surviving liquidation over a decade ago.
Cecil Madondo of Tudor House was appointed the judicial manager. According to papers gleaned by NewsDay, Merlin was still struggling to raise required capital, even though the judicial manager had made frantic efforts.
As such, Madondo disclosed that they have engaged the financial institutions with the view of helping them secure investors for Merlin.
“We recently signed a Mandate Agreement with CBZ Bank for assistance in securing investors for Merlin.
“A similar agreement was signed with FBC Securities, for assistance in securing investors for Merlin,” he said.
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Madondo said they were approached by the Zimbabwe Asset Management Company, who had agreed that the Merlin case would be considered under its normal credit assessment criteria.
Prior to that, Madondo made efforts to secure investors for Merlin to no avail.
According to the papers, in March 2012, Madondo made an application for a loan of $1m from CABS, after the introduction of the Distressed Industries and Marginalised Fund (Dimaf), but his application was unsuccessful with the bank, citing that the fund was not meant for companies under judicial management.
Madondo said following the announcement by then Finance minister Tendai Biti that Dimaf should be extended to companies under judicial management, they re-submitted their application to no avail.
In July 2014, Madondo prepared and published an expression of interest document, inviting credible investors for the company. Even though some investors showed interest, there was no concrete offer made to the provisional judicial manager, he said.
The workers have a pension fund managed by Aon Consulting with a value of about $2,4 million. The board of trustees had given the judicial manager a green light to either borrow the funds or use the fund as collateral.
“An application was made to the Insurance and Pensions Commission in July 2013, for a short-term loan from the pension fund to restart operations, but it was to no avail,” he said.
