THE High Court in Bulawayo has set November 5 for creditors of troubled Archer Clothing to present further proof of claims and to vote again on the offer from Paramount Garments.
In March this year, creditors voted to approve the firm’s takeover by Paramount, a Harare textile company, but the takeover is yet to be concluded after one of the 45 creditors voted against the acquisition.
Despite the stalemate, Paramount in September resumed operations at the company, employed 205 workers and last week said it could add another 100 jobs by year-end. It has so far committed $2 million in reviving the company and intends to spend another $5 million in expanding its operations.
“A creditors’ meeting has been approved by the High Court for November 5 2014 to allow for the further proof of claims and to vote on the offer from Paramount. The return date was extended by the court to the same date. So if the offer is not accepted, the company is likely to be liquidated,” Paramount Garments managing director Jeremy Youmans said.
Asked about what would happen to Paramount’s investment if the takeover deal fell through, Youmans said: “Some of it would be recovered in the increase in value to the assets, but most would be lost due to the realisable values of assets in Bulawayo at present.
“Obviously, wages, systems developments and general upgrades would not be recoverable. So we sincerely hope that will not happen.”
He said Paramount would continue to rebuild Archer despite the circumstances surrounding the takeover process.
“Start-up costs absorb a significant amount of money as does the build-up of working capital and stocks, so any delays are very expensive and can derail investment plans,” he said.
– The Source