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THE country’s leading blanket manufacturer, National Blankets, will soon be removed from judicial management as the company has offset its debts that threatened it with closure four years ago. National Blankets was placed under judicial management in 2012 following viability constraints.
The company’s outgoing judicial manager, Mr Philip Ndlovu of PNA Chartered Accountants said National Blankets had managed to settle its debts and a provision to hand over the running of its business to its new shareholders would be made at the High Court soon.
National Blankets manufactures a wide variety of products ranging from high-tech blankets such as airline blankets through to quality furpile and felted products, relief blankets and woven products.
“National Blankets is no longer under judicial management as it has now settled all the creditors as per scheme’s arrangement and now all its creditors and previous shareholders are now shareholders.
“The members have requested that they be given the opportunity to run their company so it’s something that we are working on but I wouldn’t like to comment more before the matter goes to court,” Mr Ndlovu said.
He said the agreement was reached at a shareholders’ meeting that was held on 18 June where an application to the effect that present post judicial management creditors be engaged to make payments was also reached.
“There will be new board members now that the shareholding has expanded and the company is looking forward to engaging other funders to inject more working capital to increase production,” Mr Ndlovu said.
The company has over the last two years made concerted efforts to clear its debts and last year the textile firm cleared $1 994 035 it owed Capital Bank when it raised $2,6 million from the sale of Industrial Plot Number 39 to the National Social Security Authority.
“Production is taking place although we are experiencing delays in the shipping of our (raw material) goods because of cash constraints. There is high demand of our products and if you go there you will see that production is taking place,” Mr Ndlovu said.
The company imports most of its raw materials from India.
“The fact that the company has managed to survive this far, since September 2010, shows that a lot has been done and shareholders are willing to protect jobs,” he said.
Mr Ndlovu, however, said the company needed capital injection amounting to $3 million for the procurement of raw material.
“National Blankets will require an excess of $3 million and the bulk of that money will go into raw material and supplying the market and making us more visible in the market.
“Cost containment has already been addressed so the funding will go straight into production because we want to satisfy the market. It’s not going to settle old debts because that issue has already been dealt with,” he said.
Mr Ndlovu said improved production ready the company to explore the regional market.
“We are out there in the neighbouring countries making forays even without adequate funds. At the moment we are exporting because a number of Mozambique nationals are coming and buying our products. We are also exploring markets in Botswana, Zambia, Malawi and Namibia,” he said.
The company’s judicial manager said the firm was not feeling any pinch from the influx of cheap imported blankets since its “order book is always full”.
“Our order book is full and production is ongoing. The only problem we are facing is delay in shipping raw material from India. We are also faced with slow payments from the debtors which is however, a challenge being faced by virtually every company in the country,” Mr Ndlovu said.
As part of boosting its coffers National Blankets recently put an advertisement announcing the auctioning of its old and obsolete machinery.
The company invested in the acquisition of state-of-the-art machinery a few years ago.
Industry and Commerce Minister Mike Bimha hailed the removal of National Blankets from judicial management stating that it was an indication to industry that economic ills could be overcome.
“We are very encouraged by a lot of progress that is taking place in most companies. We had a number of companies placed under judicial management which is a sign of challenges and when they recover it’s a good sign. A number of companies are turning around,” he said.
Minister Bimha said his ministry was pleased by reports of companies being removed from judicial management.
“It’s also a message to industrialists that it can be done. There are quite a number of companies that are on the verge of being removed from judicial management but I won’t mention them at this moment,” he said.
The Association for Business in Zimbabwe chief executive officer, Dr Lucky Mlilo said the removal of National Blankets from judicial management was an exciting development considering that most companies that go through this arrangement ended up being liquidated.
“It’s a good development because I have been watching the company receiving a number of court orders over the past years. Most of the companies that are placed under judicial management end up closing shop.
“However, National Blankets has managed to prove that there is life after judicial management and we hope to see more companies taking this path soon,” he said.
Online Reporter