TEXTILE company, Merlin, says it is still engaging foreign investors who have expressed interest to invest $30 million into the company and is confident that the transaction will succeed.
BY MTHANDAZO NYONI
The company’s judicial manager, Cecil Madondo of Tudor House, told NewsDay in emailed responses that negotiations for the investment were still underway.
“We wish to advise that manufacturing activities have resumed at Merlin with processing of lint to yarn having started this month in the spinning division,” Madondo said.
“Further, we are still engaging foreign investors who have expressed interest to invest in Merlin and we are confident that the transaction will succeed with the company receiving the much needed investment of about $30 million over a period of 5-10 years.”
He said repairs and maintenance were in full swing during the months of January and February across the various departments.
Prior to the resumption of operations, Madondo said a number of activities took place at the factory, which included power and water reconnection.
He said yarn, which was a key raw-material, had already been delivered to the factory and they were anticipating more deliveries from their business partner.
“We have identified 10 main products lines that we intend to start with and samples of the products will be sent to the market to obtain orders. The company also received 30 metric tons of lint from the joint venture business partner on the 23rd of February 2018. The lint is currently being processed through the spinning division,” he said.
“We have also made payments for repairs to key equipment namely, forklifts and the compressors which are critical for production to run smoothly.”
Madondo said the company also received an order to dye 306 tonnes of yarn for the client’s export market and based on their capacity the order will take at least 18 months to complete working three eight-hour shifts per day.
“We are currently working on the samples sent by the client for tasting before we start the work,” he said.
Madondo said repairs and maintenance work was still ongoing in the other departments and they have targeted to complete the dyeing division which already has orders waiting for dyeing and bleaching.
“We have already placed an order for coal with Hwange Colliery for the boiler. After the dyeing department, we will move to the other departments such as weaving, which requires spare parts that need to be imported from outside the country. Hence, we will mobilise resources with the assistance of the government to secure the foreign currency required,” he said.
Madondo said the company would be removed from judicial management upon fulfilment of the provisions of section 314 of the Companies Act (Chapter 24:03), or within 12 months from date of resumption of operations in line with resolutions passed at the last meeting of creditors and members held on October 18, 2017.
In the short-term, the company needs $2,1m, in the medium term $4,5m and in the long term, $23,4m.
In total, it needs $30m.