HARARE textile firm Paramount Garments says bickering among creditors of ailing Bulawayo-based Archer Clothing Manufacturers is preventing its take-over of the company, nearly four months after they approved it.
In March, Archer creditors approved its take-over by Paramount Garments at the High Court, saving it from liquidation and raising hope that one of Bulawayo’s oldest companies and major employer would be revived.
Paramount managing director Jeremy Youmans told The Source on Wednesday that one of the creditors was now trying to veto the agreement, resulting in the delays in finalising of the takeover.
“We had set aside $5 million for the Archers takeover which we wanted to invest over some time but we cannot do anything as we are waiting for the creditors to confirm the deal,” he said.
“How one creditor is holding up the process when 40 had voted for, I really do not know. On our part, the delay is frustrating.”
Archer was placed under judicial management in 2010 after failing to raise working capital and subsequently provisional liquidation last year.
Its machinery is outdated and expensive to maintain while the company also had to contend with power cuts and cheap imports.
Take over negotiation started last year after the two firms initially entered into a cut, make and trim deal.
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Under the deal the Harare company supplied clothing material and labour while Archer provided the working space.
Archer was one of the biggest employers in Bulawayo with an average of 500 employees, most of which were laid off in 2010 when the company was placed under judicial management.
The problems at Archer Clothing mirrors the decline of the textile sector which used to employ over 35 000 workers and produce 135 million garments annually.
The sector is now only producing around 7 000 garments per year.
— The Source
