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Senior Business Reporter
THE date to conclude the takeover of Archer Clothing by Paramount Garments has been moved indefinitely after the initial deadline lapsed on Thursday, an official has said.
Archer Clothing has been facing operational constraints that saw it placed under judicial management in 2010 owing to a shortage of working capital before downsizing and offloading a number of its workforce.
The firm’s creditors approved its takeover by Harare-based Paramount Garments at the High Court in March this year, saving it from liquidation.
However, the takeover deal has not been finalised after one of the 45 creditors voted against the acquisition.
Paramount Garments managing director Jeremy Youmans told Business Chronicle the High Court had postponed the date the provisional liquidator was required to justify why the company cannot be placed under liquidation.
The High Court had set October 9, 2014 as the return date.
“I’ve been informed that the return date has been extended to a date, which I’m yet to be informed of.
“The provisional liquidator (Philip Ndlovu) has applied for the extension,” said Youmans.
Ndlovu, who was said to be out of office, could not be reached for comment.
Should the provisional liquidator fail to prove his cause, Archer Clothing would be liquidated, a development that will render about 205 workers that Paramount Garments recruited last month, jobless.
In the early stages of re-opening, production at Archer Clothing was expected to improve to 25 percent.
Discussions for the takeover of the distressed firm began in 2013 when the two companies entered into a Cut-Make-Trim arrangement.
Last month, Youmans told Industry and Commerce Minister Mike Bimha his firm was looking forward to injecting $5 million in Archer Clothing in the long term.
He said they had started sprucing up the company’s premises with more than 800 workers expected to be employed in the first quarter of 2015 if the takeover deal sails through.
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