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Oliver Kazunga Senior Business Reporter
INDUSTRY and Commerce Minister Mike Bimha says the government would only intervene into Archer Clothing takeover dispute if approached by the bickering parties.
The Bulawayo-based firm was placed under judicial management five years ago and has been on provisional liquidation since last year due to lack of working capital before scaling down operations.
There is increased concern over the stalemate in the takeover of the firm by Harare based Paramount Garments with CBZ Bank, a major creditor, opposed to the deal despite a vote by other creditors.
Archer creditors are owed $14 million with CBZ owed $3,8 million.
The proposed takeover approved in March last year is envisaged to save the company from liquidation and position it for revival.
At a creditors and members’ meeting held on January 14 this year at the High Court in Bulawayo, all the creditors voted in favour of the takeover deal while CBZ has remained adamant and thus stalling progress to the conclusion of the deal.
Commenting on the issue Minister Bimha said his ministry was yet to be approached regarding the on-going bickering.
“We can only intervene if they want us to intervene. When businesses have a dispute, it doesn’t mean they’ll come to my ministry,” Bimha said.
“There’re so many ways of solving a dispute, some go to the mediators, arbitrators, and the courts. So, if they approach us, we’ll intervene.”
The takeover dispute has caught the attention of the empowerment lobby group, Affirmative Action Group, which has vowed to approach the government seeking a solution.
Paramount Garments has invested $2 million into the ailing firm and hired more than 200 workers last September as it seeks to revamp operations.
Should the takeover deal succeed, the new investor plans to increase the workforce at Archer to more than 800 workers this year.
In the long-term, the firm requires $5 million capital injection to refurbish property, machinery as well as provide working capital.
The revival of Archer is critical to Bulawayo, which continues to suffer massive de-industrialisation due to the economic challenges.
In the past few years, more than 100 firms have closed down in the city leaving at least 20,000 workers jobless.
Bongani Ndlovu