Zamco ready to bail out Merlin
By Oliver Kazunga
The Zimbabwe Asset Management Company (Zamco) says it is ready to disburse a $5 million recapitalisation facility to Merlin once the company is handed over to its shareholders by the judicial manager.
Towards the end of last year, the High Court in Bulawayo ruled that Merlin (Private) Limited, whose judicial manager was Mr Cecil Madondo of Tudor House Consultants, was a fictitious and non-existent company that does not in any way affect the status of Merspin Limited.
Prominent city businessman, Mr Delma Lupepe, is the key shareholder in the two Bulawayo-based textile firms through Maydeep Investments.
Speaking by telephone from Harare yesterday, Zamco chief executive officer, Dr Cosmas Kanhai, said:
“We are yet to disburse the $5 million funding to Merlin because there are some processes that Merlin need to do before the release of the funds.
“As you may be aware the case between Merlin and Madondo was sort of removed from the courts.
“The thing they are supposed to do now is to do the handover-takeover of the company with Madondo before we can release the money”.
Zamco was created by the Reserve Bank of Zimbabwe in 2014 to mop up non-performing loans after an insidious culture of dishonouring credit obligations took root, choking banking institutions from providing fresh loans to the market.
“If we give them now, they haven’t taken over the company, so what we have advised them is to engage Mr Madondo so that he hands over the equipment, the premises and whatever is there . . . and once that is done they have to give us signed copies that they have now taken over the company and can now operate the company then we can release the funding to the company,” said Dr Kanhai.
“That is the process we are waiting for them to complete which they are currently seized with.”
According to the court papers, Mr Madondo has to handover the company to the shareholders.
The Zamco boss also revealed that there were other processes relating to the handover of the company to its shareholders, which the parties were also working on.
“There are other processes that they are supposed to do which they are also currently doing. Once they have completed that they will advise us. Other processes are private matters that involve their creditors, which they are engaging.
“Other processes have been done but the only outstanding issues are to do with the handover-takeover and the engagement with their major creditor,” said Dr Kanhai.
He said Merlin has also set up a board, which is one of the requirements the textile firm needs to fulfil before accessing funding from the asset management company.
As part of turning around the ailing company and resuming operations, Merspin Limited has secured technical partners from Switzerland to redesign the local plant and recommend new equipment for the proposed factory upgrade.
The company closed down in 2010 due to the harsh economic climate Zimbabwe experienced in those years.
At its peak, the textile firm employed about 1 000 people and as it emerges from the woods, the shareholders are optimistic that the turnaround strategy will be implemented in phases starting with creation of 100 jobs.
Since 2015, Zamco has been assuming mortgage bonds, non-insider loans and non-performing loans for companies in good stead to clean balance sheets of financial institutions. The Chronicle