Online Reporter
Edgar Vhera
Specialist Writer – Agribusiness
THE Cotton Company of Zimbabwe (Cottco) has initiated processes to place the organisation under corporate rescue and appoint a corporate rescue practitioner.
This comes as the 2026 cotton marketing season dawns this month.
A corporate rescue is a formal, legal process aimed at rehabilitating a company in financial distress and saving it from insolvency.
It provides a momentary, structured framework for an ailing business to streamline and manage its operations and debts to return to solvency.
A qualified, independent corporate rescue practitioner (CRP) is appointed to take over management of the company from the existing board and directors.
Cottco board chair, Mr Sifelani Jabangwe, said the process of putting the entity under corporate rescue was aimed at strengthening it, adequately capitalising the business and restructuring its business model for the organisation to continue playing a critical role in achieving Vision 2030.
“Since 2016, when Cottco’s resuscitation was supported by the Government, Cottco has had a weak balance sheet such that it required guarantees to secure loans to fund annual cotton crop cycles.
“Legacy debts further accrued as a result of El Niño drought of 2024, where the national cotton crop production dropped to its record lowest of about 12 000 tonnes with Cottco’s intake at 9 900 tonnes,” he said.
Mr Jabangwe said this intake was below the break-even volume for the organisation, resulting in accrued debts. To clear these legacy arrears, Cottco needed to undertake a capital raising exercise.
“This process was delayed due to the backlog in audited accounts, which occurred between 2015 and 2019 when Cottco did not have a board.
“The accounts have now been updated to 2023 with 2024 and 2025 accounts expected by September 2026,” he added.
Mr Jabangwe said although this process was only six months from completion, some of the creditors were getting impatient and were seeking to attach property.
“So, to protect Cottco assets and allow for the capital raising exercise, the board resolved to place the entity under corporate rescue as attachment of its assets would have done harm to the prospects of Cottco and the country at large,” he noted.
