Oliver Kazunga, Senior Business Reporter
THE Government will not allow National Blankets to go under liquidation and measures are underway to resuscitate the company, Industry and Commerce Deputy Minister Chiratidzo Mabuwa has said.
The Bulawayo-based textile firm was placed under judicial management in 2012 following viability concerns.
The company faced a drastic fall in the demand of its products that were woven blankets and no longer have a market due to the influx of cheap imported textile products mainly from the Far East.
Deputy Minister Mabuwa who was in Bulawayo since last week touring city companies, refuted reports that National Blankets was folding up.
“Terminologies are dangerous especially if used by lay people. We become so loose in terms such that they are either misinterpreted or used incorrectly. But there is nothing like liquidation at National Blankets. Liquidation means a company is closing; it is no more, dead. We have come to make sure that the company opens,” she said, in an interview following a closed door meeting she held with National Blankets judicial manager, Mr Philip Ndlovu.
Deputy Minister Mabuwa was in Bulawayo to meet manufacturing companies in their own backyards to discuss the challenges they are facing and try help to them overcome the constraints in the best way the Government can.
She said an accountant or a legal person can talk of liquidation knowing a technical re-arrangement of a firm’s balance sheet.
“But it (balance sheet) can change hands through several avenues that can qualify for that or a totally different ball game altogether.
“Why I am disputing that in this instance is that I cannot be talking of re-opening and liquidation on the other,” said Deputy Minister Mabuwa, adding that the term “liquidation” could be used as a technical word to achieve re-opening.
In May, National Blankets was reported in some sections of the media to be beyond resuscitation stage, with Mr Ndlovu indicating to creditors in a letter that the company was insolvent as liabilities were significant and exceeding assets by a wide margin.
Deputy Minister Mabuwa said part of her tour of Bulawayo industry as mandated by Industry and Commerce Minister Dr Mike Bimha was to resolve the issues that were stunting production at National Blankets.
She could not be drawn into revealing the nitty-gritties of her discussion with Mr Ndlovu but indicated that the focus was to ensure the textile firm is “up and running”.
“The end result would be that company should be up and running.”
Commenting on how soon National Blankets would resume production, she said:
“It depends on what we will do for it to be up and running and we want to go back to its re-opening as soon as possible. There are funding challenges there (National Blankets). They have got the state-of-the art machines.”
Deputy Minister Mabuwa could also not be drawn into divulging how much working capital was needed at National Blankets stating that shareholders of the company had informed her of the figure in confidence.
In 2013, the textile firm, which is one of the oldest companies in Bulawayo sold off some of its property to pension fund, the National Social Security Authority, and settled debts to the now defunct Capital Bank and service providers like Bulawayo City Council, a combined total of $2,6 million.
In the 2013 judicial manager’s report, National Blankets secured $500 000 loan facility from the Central African Building Society (CABS) under the Distressed and Marginalised Areas Fund.
National Blankets faced a drastic fall in the demand of its products that were woven blankets and no longer have a market due to the influx of cheap imported textile products mainly from the Far East. @okazunga