Business
12 - 23 February 2014 - The Observer
The Observer
23 February 2014 10
The Observer - 08 December 2013 -- 12
149 companies apply
for liquidation
Mugabe hints at Botswana gem model
Discovered in 2006, the Marange
Since commercial exploitation
diamond field has been reported of the Marange gems began a few
to contain huge diamond deposits a years ago, the government is
capable of satisfying 25 percent of expecting diamond revenue to play
the global market.
a considerable role in economic
The government has partnered revival efforts.
some foreign firms in mining the
The country held its first ever
Marange gems.
diamond auction in Antwerp last
“In fact, revive reorganizing the December, generating 10.7 million
T least 149 companies filed for applied for liquidation. The number increased to buy basic material required towe are them.
diamond face as so that
“The major problem we industry judicial we create U.S. dollars from the sale of about
liquidation at the High Court in to 73 in 2011 and more than doubled in 2012
managers is lack of one or justcapital in order not more 300,000 carats of diamonds.
access to two companies
2012, failing to keep up with high to 149.
The number could be higher in 2013 as to address these problems,” he said. we have in South
operational cos ts a local think tank said on
than that, like
A second auction at Antwerp of
Another judicial manager, Reggie Saruchera Namibia, about 900,000 carats ran from Feb.
Friday, and more are seen going under in 2013 the economy is stuttering in the aftermath
Africa, in Botswana,
as economic conditions worsen.
of a disputed July 31 election that extended of Grant Thornton said the empowerment
Angola. You do not have multiplicity 12 to 21.
Companies are battling with high financing President Robert Mugabe’s 33-year rule and law requiring foreign owned companies to be
of companies doing diamonds,” the
The government has said it plans
costs, with banks charging as much as 20 a cash squeeze that has reduced consumer 51 percent owned by local blacks was making
president said.
to widen its market base by selling
it difficult for potential investors to put their
percent interest and the Zimbabwe Economic demand.
He said the state, one or two its diamonds in the United Arab
Policy Analysis and Research Unit (ZEPARU)
Cecil Madondo of Tudor House money in distressed companies.
companies and a possible foreign Emirates, China and Botswana
“There must be a difference on how the
said most of those that applied for liquidation Consultants who has managed 25 companies
partner were all
were on the basis that they could not pay their in nearly two decades, said most companies company is being bailed out,” he said. that Zimbabwe before it begins domestic sales
possibly by June this year.■
were placed under judicial management or
He called for aneeded to exploit its gems.
legislation that forces
debts
“A partner who is reliable, who
of
Labour
remain liquidation due to country, producing neighbours that
Agencies costs in Zimbabwe are among the operational in the gross mismanagement, lack shareholdershave distressed companies to
the benefit of creditors.
highest in Southern Africa while the electricity of effective corporate governancefew diamond mining firms.
structures relinquish power forhas also capacity from the point
very
IMBABWE
is President Robert Mugabe has said.
of view of technology
and high level was quoted
costs remain prohibitive its diamond
and most companies veteran leader of indebtedness. Currently, there “They don’t want to relinquish shareholding, as indeed
The
are seven
streamlining
“You that company technically insolvent they in Marange also from the business
are stuck with aged machinery that is expensive as saying find athe country companies mining gemsdon’t have money to put into thepoint of view of
sector so that only Friday
sometimes its more liabilities than assets and at the same time the depositorsMugabe said.
to maintain.one or two companies needs to emulate with diamond in the eastern part of the country.
investment capital,” and
Reggie Saruchera of Grant Thornton
creditors are suffering, where do we draw the
The number of companies seeking regardless of its viability,” he said.
employers making it difficult for a judicial
liquidation has progressively increased since
He said undercapitalisation was a major line?” he said.
He also complained about the country’s manager to retrench where necessary in order
dollarisation in 2009. In 2010, 50 companies, challenge facing most companies under
almost five times more than the prior year judicial management resulting in them failing labour laws which were not favourable to to revive a company.
A
Z
PG scrambles to avert liquidation
P
US backs Zim women entrepreneurs
to boost trade
G INDUSTRIES Zimbabwe (PG)
Secured lenders opted for a swap of payment plan.
a nominal value of $0.001 each at a similar
is seeking shareholder approval for the debt with immovable properties and a
The company proposed that debenture conversion price.
a $3.5 million capital raise in a bid deferred payment plan to settle the amounts holders convert them to PG ordinary shares,
The conversion price is based on a 60to avert liquidation, the company at an interest rate of 12 percent per annum.
subject to shareholder approval.
day volume-weighted average price as at
said in a circular on Friday.
PG said at least $3 million would be settled
Debenture holders agreed to convert $6.72 30 December 2013, the last day before the
The hardware retail group plans to through the swap of debt option while the million worth of debentures plus accrued company’s shares were suspended from
restructure its balance sheet through a scheme balance would be settled through the deferred and unpaid interest to ordinary shares of trading on the local bourse. – Source
he United States Embassy government officials from the Zimbabwe chapter is to capitalize
AWEP was established in coincides with the Africa Growth
of arrangement with various lenders and
has supported the launch Ministry of Women Affairs, Gender on providing (opportunity) for July 2012 by the United States’ Opportunity Act (AGOA) Forum
creditors, restructure its business to improve Community Development; women in business.
of
the
Zimbabwean and
Department of State through when held in Washington, DC, and
efficiencies and raise the fresh capital. and the Ministry of Industry and
Chapter of the African Women
“We believe as AWEP that once international exchange programs is designed to help the entrepreneurs
As at September 30, the (AWEP)
Entrepreneurship Program company’s balance
involving American and African build business alliances, develop
sheet was characterised by a $5.3 million worth
at a funtion in Harare recently.
women.
advocacy and communication
of The group whilework to expand
bank loans will creditors were owed $18.7
The program identifies and builds skills, network, identify resources to
million. It is also saddled with $6.72 million
and support Zimbabwean women
networks of women entrepreneurs advance women›s entrepreneurship,
in business as well as assist them
across sub-Saharan Africa who own and take advantage of opportunities
worth of debentures and a negative equity
export goods and services
and run small and medium scale for US partnerships through
position of $3.3 million. to other
countries,company is the United insolvent,
including technically
businesses.
AGOA.
“The
States.
Since its establishment, four
Trade between Zimbabwe and the
and unless it enters into an arrangement with
“I am excited to seego into liquation,” said
the launch of
Zimbabwean
women
have United States continues to blossom
creditors, is likely to
this AWEP chapter in Zimbabwe,”
participated in the program and with Zimbabwe recording a trade
the company in a statement to shareholders
said Ambassador Bruce Wharton at
form the core of the group that is surplus in seven of the last nine
on Friday.
the launch.
establishing a Zimbabwean chapter. years. According trade data from
As part of a private placement, the company
“I have often said that Zimbabwe’s
They, along with four other the United States Department of
is seeking to place one billion new ordinary
strongest resource is its people – and
participants from other U.S. Commerce, Zimbabwe imported
shares with Old Mutual Life Assurance at a
this is a perfect example of those
exchange programs such as the US$53 million worth of goods from
price of $0.001 to raise $1 confident
resources in action. I am million.
Fortune/State Department Global the United States while the United
BancABC agreed to have taken a loan
advance PG
that these women, who
Women’s Mentoring Program, form States purchased US$52 million of
of $1.1 million while the company secured
initiative not only to start their
the founding committee for the goods.
United States Ambassador Bruce Wharton
buyers for $950,000 worth of properties.
own businesses but to contribute
chapter.
to PG is also currently in discussions with
the Zimbabwean economy, will
Participants to the AWEP
For more information please
make banks secure an of the Commerce.
women are given an opportunity to exchange programs travelled to the contact the AWEP chairperson,
variousimpact tothe futureadditional $440,000
Zimbabwean used to secure facilities inBarbara Rwodzi, CEO of House succeed, they will do so,” she said.
U.S. for three weeks where they AWEP offices, 34 Lawson
which will beeconomy.”
the
Similar AWEP chapters credit.
“AWEP believes in expanding met business leaders, policymakers, Avenue; Milton Park; Zimbabwe,
form of guarantees or letters ofhave of BarRue Knitwear, a successful
been established in countries such business that exports handmade women›s role in shaping national companies and industry associations, Tel. 08644110932 or visit www.
Meanwhile, the company held a scheme of
as Nigeria and Zambia. Sylvia garments, is founding chairperson business climates and leading non-profit groups advocating for awepzim.org Twitter : @
arrangement meetings with its creditors on
Banda of Zambia, Pan African of the
January 24 whom it owes $5.3million (secured AWEP chapter in Zimbabwe. the way in social reform. We women›s economic opportunities, awepzim
AWEP Chairperson, is expected to She visited the U.S. through the aim to transform Zimbabwean and
multilateral
development
lenders) of which $934,000 was cleared prior
attend the launch ceremony which AWEP exchange in 2012. “The communities through business organizations.
to the meeting.
will also be attended by senior main theme for the launch and the achievements.»
The annual exchange program
T