Oliver Kazunga Senior Business Reporter
THE Affirmative Action Group (AAG) has urged the Commercial Bank of Zimbabwe to cooperate with other creditors and pave way for the Archer Clothing takeover deal by Paramount Garments once a Deed of Agreement has been signed.
The Bulawayo-based firm was placed under judicial management in 2010 and provisional liquidation last year due to lack of working capital before scaling down operations, leaving hundreds of workers redundant.
Last month, a meeting of creditors and members to provide proof of claims as well as voting on the scheme of arrangement was held at the Bulawayo High Court with all Archer creditors except CBZ approving the takeover deal which will save it from liquidation.
“We’re waiting for Archer and Paramount to sign the deeds of agreement after which we’ll approach CBZ to discuss the matter as we won’t allow creditors’ bickering to hold back the revival of Archer Clothing,” AAG national vice president Sam Ncube told Business Chronicle.
A Deed of Agreement is a legally binding contract between parties.
“At the creditors and members’ meeting held on the 14th of January at the High Court, all the creditors voted for the takeover deal except CBZ, which is objecting to the deal. A report from the Master of High Court has shown that 75,2 percent of the creditors except CBZ have supported the takeover which is aimed at reviving operations at Archer,” he said.
Archer owes creditors more than $14 million with CBZ owed $3, 8 million.
Paramount Garments managing director Jeremy Youmans said: “We got a report from the Master of High Court on the 10th of February after the creditors meeting was held on the 14th of January. The creditors have voted for the takeover deal except one creditor. We’re waiting for the confirmation of the report and only then can we sign the Deed of Agreement.”
He said they were not taking new orders until all the legal processes were finalised.
Efforts to get a comment from CBZ managing director Never Nyemudzo were unsuccessful as he was said to be in a meeting.
In March last year, the creditors approved the takeover of Archer by Paramount Garments raising hope that one of Bulawayo’s oldest companies and major employers would be revived.
The takeover negotiations between the two companies started in 2013 after they initially entered into a cut, make and trim deal.
Under the deal, the Harare firm supplied clothing material and labour while Archer provided working space.
At the first vote last year, 44 out of the 45 creditors approved the Paramount bid, but one dissenter’s objection delayed the process.
Another attempt to take over the company failed after a creditors and members’ meeting that was set for November 5 last year failed to take place.
This saw Archer Clothing being given up to this month to conclude the takeover by Paramount or risk being liquidated, throwing more than 200 workers recruited in September 2014 out of work.
Archer was established in 1953 and was among the largest garment manufacturers in the country before its collapse.
So far, Paramount Garments has committed $2 million towards Archer’s revival.
The firm requires a $5 million capital injection in the long-term to refurbish property, machinery, cater for human resources and working capital.