BULAWAYO – The creditors of struggling Bulawayo textile company, National Blankets, have agreed to convert their undisclosed debt into equity, a deal which will take the company out of judicial management, the judicial manager has said.
The creditors held a meeting with shareholders last month where it was agreed that all the debt would be converted to equity at the rate of $0,50 per ordinary share.
The creditors exclude Capital Bank and service providers such as Bulawayo City Council, who were paid a combined total of $2,6 million after the company sold off some of its property to NSSA last year.
“Effectively National Blankets is now out of judicial management, but we still have to approach High Court to finalise the transfer,” judicial manger Phillip Ndlovu told The Source.
National Blankets, one of the country’s largest textile firms, was placed under judicial management in 2012 following viability constraints.
Over the years, investors were not keen to inherit the debt, forcing the company to explore the option of converting it into equity.
Ndlovu said after the agreement, he would approach the High Court to initiate proceedings to hand over the company to its new shareholders. He, however, said the company still needed about $3 million to capitalise since the new shareholders are not necessarily bringing in immediate capital.
The company is currently operating at a third of capacity at 20 000 blankets a month. — The Source
