‘Archer revival tonic for Bulawayo industry’

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THE scheme of arrangement between Archer Clothing Manufacturers and a Harare-based firm, Paramount Garment, will resuscitate business and potentially create significant employment opportunities in Bulawayo, according to the judicial manager.

THE scheme of arrangement between Archer Clothing Manufacturers and a Harare-based firm, Paramount Garment, will resuscitate business and potentially create significant employment opportunities in Bulawayo, according to the judicial manager.

MTHANDAZO NYONI OWN CORRESPONDENT

Archer creditors approved a takeover of the company by Paramount Garments in January, saving it from liquidation.

Thirty-three out of 34 creditors, who are owed more than $14 million by Archer approved the Paramount takeover bid. The creditor that voted against the bid is owed $3,8 million and is believed to be CBZ Bank.

Takeover negotiations between the two companies started in 2013 after they had initially entered into a cut, make and trim deal.

Under the deal, the Harare-based company supplied clothing material and labour while Archer provided the working space.

At the first vote in March 2014, 44 out of the 45 creditors approved the Paramount bid, but the one dissenter’s objection delayed the process.

Another attempt to take over the firm suffered a stillbirth after a creditors’ and members’ meeting set for November 5 2014 failed to take place.

Archer Clothing judicial manager Philip Ndlovu of PNA Chartered Accountants said the deal between two companies would help resuscitate industry in Bulawayo.

Ndlovu said Archer Clothing had been a key player in the textile industry in Bulawayo and its takeover would lead to the revival of one of Bulawayo’s oldest firms.

“The meeting held at the High Court of Zimbabwe in Bulawayo saw creditors voting in favour of a proposed scheme of arrangement/offer of compromise expected to give the company a new lease of life,” Ndlovu said.

“This scheme, together with the backing of Paramount Exports (Pvt) Ltd, will resuscitate the business and allow for the return of the company’s fortunes.”

Ndlovu expressed gratitude to all stakeholders who have been involved in “this significant step in the revival of the clothing and textile industry”.

“Archer Clothing’s re-emergence is a positive step in the resuscitation of business in Bulawayo, potentially creating significant employment opportunities,” he said.

Archer was established in 1953 and was among the largest garment manufacturers in the country before its collapse.

It has been battling operational challenges that saw it being placed under judicial management in 2010 and provisional liquidation in 2014 due to lack of working capital. It scaled down operations, leaving hundreds of workers redundant.

Its machinery is outdated and expensive to maintain while the company had to contend with power cuts and cheap imports.

At its peak, the textile sector used to produce about 135 million garments annually, compared to the current 18,7 million. Paramount Garments has so far committed $2 million towards reviving Archer, although the deal is yet to be finalised.

Archer needs about $5 million capital injection in the long-term to refurbish property, machinery and to cater for human resources and working capital.