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period during which management says it will conclude a restructuring process to preserve value for stakeholders.

In a statement, the company said negotiations with potential equity partners had reached an advanced stage to enable the company to return to normal business.
“Negotiations with potential equity partners are at an advanced stage and periodic Press unpades shall be give as necessary within this working period. All active stakeholders will be contacted for direct engagement during the course of the week,” read the statement.

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The firm said its Bulawayo division remains open for business while the administration in Harare would remain open to attend to inquiries.
Lobels’ statement comes amid reports that it was crumbling under the weight of debts which have resulted in the company losing most of its key assets to creditors.

Sources told Herald Business the bakery had closed owing to capital constraints, which worsened after a portion of the company’s property, including confectionery equipment and vehicles was attached.
It is understood the oldest bakery in the country, founded as a family business in the 1940s, had debts estimated at US$1 million.

The debts have crippled the firm, which has reportedly not been recapitalised since its cquisition from the Lobels Brothers.
A consortium of local businesspeople —- led by banker Mr Livingstone Gwata, tourism guru Mr Herbert Nkala, Retired Brigadier-General David Chiweza and Mr Fred Mutanda – holds a controlling stake in the bakery.

Alleged systematic fraudulent activities, including false invoicing and overstating payments, are believed to have cost the firm US$7,6 million.
“The bakery has shut down due to several reasons, the major one being capital constraints and attachment of the firm’s assets by creditors,” said the source. “But the management is working towards resolving the matter. I would like to believe that the closure is just temporary.”

Sources said the once leading bread maker’s creditors were Zesa Holdings, Gamster Petroleum, Sagie, CBZ Bank Limited and the Metropolitan Bank. Lobels acting chief executive Rtd Brig-Gen Chiweza recently said the firm was making arrangements to settle its debts.

Lobels is also understood to be looking for funds to recapitalise. So far, it has reportedly secured US$4 million from a local bank.
Efforts to get a comment from Rtd Brig-Gen Chiweza were fruitless.

The firm allegedly owes Gamster US$77 734.83 for oil supplies and US$41 724.40 to an unidentified firm, for raw materials.
Last year, over 20 delivery trucks were attached after it failed to retire a US$113 756 debt.

At its peak, Lobels produced about 300 000 loaves of bread daily but the capital constraints have rapidly reduced volumes in recent years.
The firm has been trying to engage partners to inject fresh capital since last year when it resumed operations after briefly shutting down towards year-end. According to market analysts, Lobels value ranges from US$25 million to US$30 million.

Of late, the bakery has been losing market share to such competitors as Baker’s Inn and Proton Bakeries. It faces collapse if not recapitalised.