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with creditors on how it intends to settle its debts, a senior official said.
The sale was to take place yesterday and could have left the country’s oldest bakery with no option but to wind up operations.
Last week, the Deputy Sheriff issued a notice indicating that assets of Lobels, which has since suspended operations, would go under the hammer yester- day.
The assets include dough mixers, bread pans, ovens, moulders, vehicles, boiler tanks, furniture, a confectionery oven and slicing machines.
LOBELS: EARLIER REPORTS
Lobels director Mr David Chiweza said the sale of the assets was cancelled after an agreement on payment was reached with creditors.
“We are at a critical stage of reconstruction of the company and on that strength we have been negotiating with our creditors and we have been able to give them a convincing explanation on the progress that we have made towards re-opening the company,” said Mr Chiweza.
“They have preferred to wait than to pull down a company which can be viable.
“This is an indication of hope and we encourage other stakeholders to be patient as we complete the reconstruction exercise.”
He said the company was on course to reopen in the first week of July. Lobels requires a capital injection of at least US$5 million.
The funds would be used to pay off debts, refinance working capital and in the medium term, to acquire state-of-the-art equipment.
“The injection of fresh capital will immediately take the company back into production,” he said.
Last year, the then managing director of the company Dr Burombo Mudhumo resigned after an audit unearthed serious abuse of funds.
But he denied any wrong doing, saying the challenges at Lobels were “deeper than meets the eye”.
The audit report revealed that the company was prejudiced of millions of dollars, siphoned through fictitious companies purported to be flour suppliers.
Lobels was once the market leader in the baking industry. But as hard times descended, the bakery started losing its market share to competitors such as Bakers Inn and Proton Bakeries.
Mr Chiweza believes the company could reclaim its market position once it has been recapitalised.
At full capacity, Lobels can produce an average of 300 000 loaves a day.
The company began operations in the late 1940’s under the Lobels brothers. In 2002, a consortium of business entrepreneurs bought Lobels.
These included Mr Livingstone Gwata, the chairman of the company, tourism guru Mr Herbert Nkala, Dr Mudhumo, Mr Chiweza and businessman Mr Fred Mtanda.
Online Reporter