Harare – David Whitehead Textiles Limited’s (DWTL) shareholders and creditors are engaged in a collision course with the judicial manager Knowledge Hofisi following a press statement issued by the latter on Friday 1 June 2019 disclosing a 51 percent acquisition of the ailing firm by Agri Value Chain Zimbabwe (AVC).
The shareholders consist of Daphne Ritson, James Ferguson and Edwin Chimanye while its creditors are largely constituted by workers who are owed $8 million.
In a joint press statement issued on Thursday, the shareholders and creditors said they have not been consulted on the developments, thus would like to distance themselves from it.
“We are not aware of the finalisation or completion of the purpoted 51 percent acquisition of DWTL by AVC represented by Pradyumin Ganediwal, as reported in the Herald of Wednesday 5 June 2019,” reads part of the statement.
“Shareholders and Creditors have not been informed of any Invitation for Bids to Potential Investors, let alone any negotiations that took place between the Company and AVC.”
According to an earlier statement by the judicial manager which is the current subject of contention, AVC acquired the controlling stake in DWTL for $5.4 million, a development which is expected to rejuvenate the troubled fabric maker.
According to a report by Herald, the new shareholder said the ‘company will immediately embark on reconstruction, subject to approvals by creditors and members.’
The ailing textile firm was first placed under judicial management in May 2005 before order was cancelled in May 2008. It has since seen the management order renewed on two more separate occasions to date.
The company which used to be the largest textile manufacturing company in Zimbabwe, employing over 3 000 people has been struggling due to unsustainable wage bill, continuous breakdown of machinery, endless labour disputes among other challenges.
It was internationally renowned for its quality and gained a fine reputation both locally and in export markets.
Prior to 2002 the company was part of Lonrho plc, a large conglomerate operating throughout Africa.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.