Ashly Dhani
Business Reporter
Truworths Limited has been placed under corporate rescue due to solvency issues but will remain listed on the Zimbabwe Stock Exchange (ZSE) under voluntary suspension up until exit from corporate rescue.
The corporate rescue is effective 7 August 2024 together with its subsidiaries namely Topic Stores and Bravette Manufacturing Company.
In a notice the company said during the corporate rescue proceedings as provided by Section 126 of the Act, no legal proceeding, including enforcement action, against the Company, or in relation to any property belonging to the Company, or lawfully in its possession, may be commenced or proceeded with in any form without the authority of the Corporate Rescue Practitioner.
The first meeting of creditors and members of the company will be held on the 28th of August 2024.
“The meeting is for the provision of an overview of corporate rescue proceedings, statement by the Master of High Court about the reasonable prospect of rescuing the company, proof of claims, and appointment of a committee of creditors,” reads the notice.
The clothing retailer’s shares were halted from trading on March 7, 2024 after the company applied for voluntary suspension.
The decision, announced by the ZSE left investors and stakeholders speculating about the underlying reasons behind the suspension but the company indicated that it wanted to address compliance related matters.
This development followed the release of Truworths’ abridged financial results for the year ended July 9, 2023. Despite operating in a challenging economic environment characterized by high inflation and market volatility, the company showcased impressive financial performance.
Inflation-adjusted revenue surged by an astonishing 245,6 percent, reaching $2,59 billion compared to $750,71 million in the previous year.
Profitability also witnessed a substantial upswing, with net profit soaring from $210,53 million in fiscal year 2022 to an impressive $1,43 billion in 2023 translating to a remarkable increase of 581.6 percent, reflecting the company’s adept management of operational challenges and cost structures.
As the market awaits further developments and clarification from Truworths, investors remain cautiously optimistic about the company’s long-term prospects.
The temporary halt in trading serves as a reminder of the inherent risks associated with investing in the volatile Zimbabwean market, underscoring the importance of robust corporate governance and transparency in maintaining investor confidence.
Bongani Ndlovu