Merlin insolvent

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BULAWAYO-BASED textile company Merlin is technically insolvent after a valuation report showed that its liabilities exceeded its assets, as the company steps up efforts to find a white knight.

BULAWAYO-BASED textile company Merlin is technically insolvent after a valuation report showed that its liabilities exceeded its assets, as the company steps up efforts to find a white knight.

Merlin, like most of Zimbabwe’s manufacturing firms, is struggling to stay afloat largely due to antiquated machinery and lack of capital. A valuation report done by Ken Estate Agents and seen by The Source showed that total liabilities for the company amounted to $4,3 million against total assets of $3,8 million.

The report showed that of the liabilities, long term creditors were owed more than $3,1 million, while just over $1 million is owed in short term borrowings. Judicial management costs amounted to $130 000.

Its non-current assets amounted to $3,78 million while its current assets were a mere $7 900.

Merlin survived liquidation over a decade ago but was placed under judicial management for the third time in December 2011.

Judicial manager, Cecil Madondo of Tudor House Consultants, who was tasked by creditors to seek new investment for the company, has approached Chinese-owned Sino Zim Cotton seeking $14 million in combined short and long term funding.

– The Source