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Oliver Kazunga Senior Business Reporter
ARCHER Clothing has up to October 9 to conclude the takeover of the company by Paramount Garments or face inevitable liquidation, which will render the 120 workers recruited in the last two weeks jobless again. The giant clothing firm has been battling operational constraints that saw it being placed under judicial management in 2010 due to shortage of working capital before downsizing and laying off dozens of workers.
Creditors approved the company takeover by Paramount Garments, a Harare-based clothing firm at the High Court in March this year – saving it from liquidation.
However, the acquisition is yet to be finalised because one of Archer’s 40 creditors has voted against the takeover.
Paramount Garments managing director Jeremy Youmans told Business Chronicle on Friday the survival of the firm hung in the balance amid fears the deal might collapse.
“As Paramount, we’re concerned that if the takeover deal is not finalised by October 9, the return date the High Court set as the day the provisional liquidator is required to justify why the company cannot be liquidated, it technically means Archer Clothing will finally be closed,” he said.
After approval of the takeover deal by a majority of the company’s creditors, the new investor had started operations at the Bulawayo clothing entity.
Youmans said as at Friday last week about 120 workers had been recruited with the target of recruiting 200 more by month end.
He said should Archer be liquidated, that would be a challenge on their investment into the company.
It was hoped that in the early stages of re-opening, production at the firm would be raised to 25 percent.
Negotiations for the takeover of the ailing company started last year when the two companies initially entered into a Cut-Make-Trim arrangement.
Under the deal, Paramount Garments assisted with labour and clothing material while Archer provided working space pending the liquidation process.
Archer Clothing needs about $5 million capital injection in the long-term to refurbish its properties, machinery, cater for human resources, and working capital in stocks and debt.
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