adminLovemore Zigara Business Correspondent
THE Industrial Development Corporation (IDC) has begun the process of liquidating one of its subsidiaries, Zimbabwe Glass Industries after the company failed to secure an investor. Zimbabwe Glass Industries (Zimglass) is the country’s sole flint glass manufacturer.
The firm is saddled with a $32 million debt and was placed under judicial management in June last year after facing viability challenges.
The Gweru based firm’s $32 million debt includes the $5,5 million borrowed for capital expenditure to revive operations after it shutdown in 2010 and a further $8,8 million in short-term loans from local banks used to rebuild the plant.
IDC general manager Mike Ndudzo told Business Chronicle that chances of the company attracting investors after liquidation were high.
He said the new owners would be starting on a new slate without being worried about the company’s debt obligations.
“The liquidation process of Zimglass is starting in due course. We still believe there’ll be investor interest in post liquidation as the new investor won’t be burdened by the $32 million debt,” he said.
“Once the company goes to liquidation, the new investor will buy assets not shares and will start on a clean slate.”
Ndudzo said chances of getting an investor were brighter after the liquidation process.
“We want to expedite the process because Zimglass is strategic to the economy,” he said.
Zimglass which manufactures glass packaging material for alcoholic and sparkling beverages, food, liquor and pharmaceuticals, is one of the troubled subsidiaries that IDC had intended to dispose of.
Its major domestic customers include Delta Beverages, African Distillers, Mutare Bottling Company, Straitia Investments, Olivine Industries, Datlabs and E Snell and Company.
Recently, IDC announced that it had also not found any buyers with the “right strategic intent and capacity” to take over its other companies namely, Allied Insurance, Almin Metal, Amtec, Deven Engineering, G&W Industrial Minerals, Surface Investments, Stone Holdings and Zimbabwe Grain Bag.
The corporation intends to shed off some of its subsidiaries to third parties.
Online Reporter