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Senior Business Reporter
BULAWAYO-based firm Archer Clothing Manufacturers will later this month convene a third creditors and members’ meeting to discuss a third scheme of arrangement. The second scheme of arrangement was held on February 28, 2014 amid reports that on the occasion, the creditors approved a take-over by Harare-based Paramount Garments, saving the city firm from liquidation.
A scheme of arrangement entails the presentation to creditors by the provisional liquidator different options available that they can choose to facilitate the settlement of amounts owed and adopting an effective turnaround strategy for the company.
Archer Clothing is one of the ailing companies in the city and was placed under provisional liquidation due to operational constraints.
“The third meeting of creditors and members will be held at the High Court on the 14th of May 2014 at 9AM for the purpose of voting on the scheme of arrangement,” said the company in a notice on Friday.
Liquidity constraints, antiquated machinery and cheap imports were some of the challenges that have put a dent on industrial recovery particularly the clothing and textile sector in Bulawayo.
Archer was placed under judicial management in 2010 after failing to raise working capital and subsequently provisional liquidation last year.
Following the adoption of a multi-currency system in February 2009, liquidity constraints have haunted the country resulting in some companies in Bulawayo being put under judicial management or liquidation.
As a result of working capital challenges, some have either scaled down operations or shut down.
Economic commentators have urged struggling entities in Bulawayo to merge in order to save them from total collapse.
Before the economic slump in 2000, Zimbabwe’s clothing and textile sector at its peak produced about 135 million garments annually, compared to the present 18,7 million garments.
The industry employed 35,000 workers, compared to current levels of just under 7,000.
Bongani Ndlovu
Online Reporter