A HARARE textile firm Paramount Garments (Pvt) Ltd is finalising talks with troubled Bulawayo Archer Clothing Manufacturers (Pvt) Ltd with a view of resuscitating operations of the Belmont-based company currently under provisional liquidation. GAMMA MUDARIKIRI OWN CORRESPONDENT
Information obtained by Southern Eye Business yesterday indicated that the Harare-based firm last year submitted a proposal for the takeover of Archer which was rejected by the troubled firm’s creditors.
Paramount Garments firm is said to have revised and resubmitted the scheme of arrangement and is now awaiting a response from the creditors on a date to be announced by the court.
Paramount managing director Jeremy Yomans confirmed the development.
“The first schedule we submitted was rejected by the creditors and we had to resubmit another one.
“We are now waiting for the court to announce a date for a meeting with creditors for the consideration of our fresh proposal.”
Negotiations for the takeover of the troubled Archer started last year after the two textiles firms initially entered into a cut, make and trim (CMT) deal.
Under the CMT deal, Paramount chiped in with clothing material and labour while Archer provided the working space pending the liquidation of the Bulawayo firm.
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Archer was laid low due to a myriad of problems, top among them a harsh economic environment and a liquidity crunch which has seen several local firms closing or listing in critical condition.
The company was placed under judiciary management in 2010 after being seriously hit by a shortage of working capital, obsolete machinery, power challenges and cheap imports which remain major constraints crippling viability of industries in Bulawayo.
In the same year the clothing company scaled down operations laying off 270 contract workers and 210 permanent employees.
The company is one of many entities qeighed by the decade of economic downturn.
As of July this year, at least 20 companies in the city had been put under judicial management while 10 others were facing liquidation.
The textile industry in Bulawayo is the hardest hit.
Some of the Bulawayo firms under judicial management include textile giant National Blankets, Tabs-Avon Lighting, Asmara, Belmont Leather, Textile Mills, Security Mills and Universal Component. Twitter feedback @mudarikirig
