The Cotton Company of Zimbabwe (Cottco) has been placed under corporate rescue as the company seeks to address financial challenges and protect its operations ahead of the 2026 cotton marketing season.
In a statement yesterday, Cottco board chairman Sifelani Jabangwe said the move was aimed at recapitalising the company and restructuring its operations to ensure long-term sustainability.
“The decision to place the entity under corporate rescue is intended to strengthen the company, recapitalise the business and restructure its operating model so that it can continue playing a critical role in achieving Vision 2030,” said Jabangwe.
Corporate rescue is a legal process designed to assist financially distressed companies to reorganise operations and debts under the supervision of appointed corporate rescue practitioners.
Jabangwe said Cottco had been facing financial difficulties for several years, worsened by legacy debts and poor cotton harvests caused by drought conditions.
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“Since 2016, when Cottco’s resuscitation was supported by Government, the company has operated with a weak balance sheet and relied on guarantees to secure loans for annual cotton production cycles,” he said.
He added that the 2024 El Niño-induced drought significantly affected cotton output, with national production falling to about 12 000 tonnes, while Cottco’s intake stood at 9 900 tonnes.
“The intake fell below the organisation’s break-even level, resulting in the accumulation of debt,” Jabangwe said.
He said efforts to undertake a capital-raising exercise had been delayed by a backlog in audited accounts dating back to the period between 2015 and 2019 when the company operated without a board.
“The accounts have now been updated to 2023, with the 2024 and 2025 accounts expected by September 2026,” he said.
Jabangwe also noted that some creditors had started seeking attachment of company assets, forcing the board to take urgent measures to protect the business.
“To protect Cottco assets and allow for the capital-raising exercise, the board resolved to place the entity under corporate rescue because attachment of assets would have harmed the prospects of Cottco and the country at large,” he said.
Permanent Secretary for the Ministry of Agriculture, Mechanisation and Water resources Development, Obert Jiri, confirmed the development but assured farmers that the cotton marketing season would proceed as planned.
“The placement of Cottco under corporate rescue will not disrupt the 2026 cotton marketing season. Farmers should continue preparing to market their crop,” said Jiri.
According to the 2025/26 Crop, Livestock and Fisheries Assessment report, cotton production increased by 26 percent following an expansion in planted area during the season.