The Cotton Company of Zimbabwe Limited (COTTCO) has been placed under corporate rescue after its board of directors cited deepening financial distress driven by liquidity challenges, high debt levels, and mounting arrears to farmers.
According to a notice issued to affected persons, the resolution took effect on April 28, 2026, and was subsequently filed with both the Master of the High Court and the Registrar of Companies and Other Business Entities, in line with statutory requirements.
Board minutes show that the company has been struggling to meet its obligations to creditors as they fall due, with directors attributing the situation to severe cash flow constraints, limited working capital, and delayed payments to cotton farmers.
These challenges have resulted in significant arrears, declining production levels, and increased reliance on State-backed input support schemes to sustain operations.
Despite the difficulties, the board noted that COTTCO retains significant assets, including infrastructure, immovable property, plant and equipment, as well as industry expertise and an established client base.
Directors expressed confidence that the company remains viable and can recover if given an opportunity to restructure under a controlled framework.
The board further indicated that corporate rescue would provide a structured platform to halt further deterioration of the company’s balance sheet, address its substantial debt burden, and support efforts to restore production capacity.
The move is intended to stabilise operations while a turnaround strategy is implemented.
“Pursuant to the provisions of section 122 of the Insolvency Act (Chapter 6:07) (‘the Act’), the Company voluntarily begins corporate rescue proceedings and is placed under the supervision of a qualified corporate rescue practitioner to restore the Company to a good financial position,” the board noted.
As part of the resolution, the company voluntarily commenced corporate rescue proceedings in terms of the Insolvency Act (Chapter 6:07), with Farai Chibisa appointed as lead Corporate Rescue Practitioner and Ian Mtetwa as co-practitioner, both of Grant Thornton Zimbabwe.
The practitioners are expected to take over supervision of the company’s affairs and lead the restructuring process.
The board also appointed ChimukaMafunga Commercial Attorneys to represent the company in the proceedings and authorised senior officials to execute all necessary legal documentation to give effect to the resolution.
Directors said there are reasonable prospects of rescuing the company and restoring it to financial health if the current intervention succeeds in addressing its immediate constraints and repositioning it for sustainable growth.
In January 2025, COTTCO had accumulated US$5.8 million in unpaid bills and was instructed to settle the debt before the end of the 2025 farming season.
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