Zimpapers Logo

Merlin, which recently secured an investor from Japan to inject $30 million into its operations, is set to resume operations early next year

Oliver Kazunga Acting Business Editor
BULAWAYO-BASED textile company, Merlin, is set to resume operations early next year employing 100 workers under the first phase of its resuscitation plan.

The firm, which was placed under provisional judicial management in 2011, recently secured an investor from Japan to inject $30 million into its operations.

According to the shareholders’ resuscitation plan, the first phase would see the textile firm resuming operations by the first quarter of next year.

“The first phase will see 100 employees being gradually rehired and by the end of the second phase 400 employees would have been hired and retrained,” said one of the company’s shareholders, Delma Lupepe.

Under the first phase, he said, it was also their plan to repair plant equipment during the festive season from spares at hand and start repaying creditors by the end of the third quarter.

Merlin owes creditors more than $4 million.

The second phase of the resuscitation plan would involve installation of state-of-the art equipment by the third quarter.

Installation of new technology comprising weaving and spinning machinery, Lupepe said, was expected to take between six and nine months after which Merlin would be capable of producing more than 250 tonnes of product per month.

A few weeks ago, Lupepe told Business Chronicle that Merlin shareholders were crying foul over the firm’s judicial manager Cecil Madondo of Tudor House for failing to revive operations at the giant textile firm that employed more than 1,000 people at its peak.

He alleged that the appointment of Madondo to judicial management of Merlin was challenged and resisted by Maydeep Investments Limited, a shareholder of the textile company.

Lupepe said the reasons cited among others were that Madondo’s credibility and trust did not invoke confidence in the shareholders, some of the creditors and potential investors.

One of the creditors, Old Mutual, successfully applied for removal of the company from judicial management citing lack of progress by the judicial manager to turn around Merlin.

Madondo has since appealed against the judgement to remove the company from judicial management saying that this was tantamount to exposing Merlin to creditors who would attach its assets.

Lupepe said this was a flimsy excuse as creditors such as Old Mutual were keen to give Merlin a moratorium to resuscitate its operations.

Due to economic challenges facing the economy, companies in Bulawayo have not been spared from operational constraints that have seen the city suffering massive de-industrialisation with over 20,000 workers becoming redundant.

Presenting the 2015 national budget last month, Finance and Economic Development Minister Patrick Chinamasa said at least 55,000 workers have lost their jobs over the past three years after 4,610 companies closed shop countrywide.

He said an urgent injection of fresh capital was critical towards resuscitating ailing industries whose capacity utilisation has dropped by 3,3 percent from 39,6 percent in 2013 to 33,3 percent this year.