Business Reporter
MUTAPA Investment Fund (MIF) entity, Cottco is cautiously following the ideal path to recovery with latest announcements pointing at abandoning wasteful yet unyielding Zimbabwe Stock Exchange (ZSE) listing.
The company has grappled with mounting arrears, including legacy debts and multi-million-dollar obligations such as roughly US$6,6 million in total tracked debts, with US$3,6 million in local debt, alongside historical loan allocations and controversy over how US$25 million in allocated funds were utilized for loan takeovers and prior obligations.
MIF assumed government’s 37.1% shareholding in Cottco (previously held by the Ministry of Finance, Economic Development and Investment Promotion) following Statutory Instrument 156 of 2023.
Representing the government as a shareholder in Parly early this year, MIF CEO Dr John Mangudya expressed dismay over the shambolic nature in which the entity was being managed.
Despite tabling a rescue plan for the troubled entity, MIF CEO ,Dr John Mangudya in May this year told Parly that such plans could not be implemented in the wake of bad management practices at the Parastatal and subsequently recommended Voluntary Rescue placement to plug the leakages.
Accordingly, in a Circular to shareholders Grant Thornton Corporate Rescue Practitioners Farai Chibisa and Ian Mtetwa confirmed a step further to stop continued payment of compliance fees to ZSE whose shares have since been suspended from trading.
“Trading in the Company’s ordinary shares has been suspended on the ZSE since November 2014, following an application by the Company for the suspension of trading made in connection with proceedings for provisional judicial management. The Suspension has remained in force continuously since that date,” the Circular reads in part.
The decision, said the CRPs comes after careful consideration by the CRPs in consultation with the Co-Financial Advisors and has been determined to be in the best interests of the Company and its stakeholders.
It was also noted that there was need to facilitate the resuscitation of the Company by developing and implementing a rescue plan aimed at restructuring its affairs, business, property, debt, and other liabilitiesr.
It was also noted that the company is unable to meet certain continuing obligations of listing, including the timely submission of audited financial statements and the settlement of listing fees, and delisting is aimed at avoiding regulatory penalties and a forced termination by the exchange in terms of sections 7(4) and 10(1) of the ZSE Listing Requirements.
