Merspin secures Swiss partners
BULAWAYO-BASED textile concern Merspin Limited, has secured technical partners from Switzerland to redesign the local plant and recommend new equipment for the proposed factory upgrade.
The company, which closed down in 2010 in Bulawayo recently cleared a legal battle between Merlin Limited’s judicial manager Mr Cecil Madondo and Maydeep Investment.
Prominent city businessman Mr Delma Lupepe, through Maydeep Investments, owns both Merspin and Merlin, a dormant company, which was under judicial management.
In an interview, Maydeep Investments executive director Mr Danisa Nkomo, said the High Court ruling issued in November has set the tone for the re-opening of Merspin.
He said Merspin has since signed a Memorandum of Understanding with their Swiss technical partners as part of efforts to restore operations at the Bulawayo textile factory.
“We have already signed a Memorandum of Understanding with our technical partners in Switzerland to re-do the plant and recommend equipment that will be used to replace the existing plant and upgrade it and everything that is accessory to that equipment for it to operate,” he said.
The Swiss technical partners, Multicom International, through their Southern African representative, Mr Hans Schnider were expected to come up with a proposal for plant design and factory equipment specifications before the end of the year.
“Then we will take it (proposal) to our Japanese investors, Teximatek to say now we have got the plant designs and this is what it’s going cost let’s put pen to paper and move the MoU to a contractual agreement,” said Mr Nkomo.
The Japanese investor has committed to injecting $30 million into Merspin, which funding the firm requires in the long-term to replace antiquated machinery and restore productivity to competitive levels at the former textile giant.
Mr Nkomo said they have asked the Zimbabwe Asset Management Company (Zamco) to mop-up the $5 million debt owed to local creditors before the new investor can pump in fresh capital into Merspin.
In 2014, the Reserve Bank of Zimbabwe created the Zamco, a special purpose vehicle to mop up non-performing loans after an insidious culture of dishonouring credit obligations took root, choking banking institutions from providing fresh loans to the market.
And since 2015, Zamco has been assuming mortgage bonds, non-insider loans and non-performing loans for companies in good stead to clean balance sheets of financial institutions.
Mr Nkomo said, “We had asked for $5 million but obviously what is going to happen is that when the claims are lodged, they will be evaluated; some might be accepted, some might be rejected and then adjustments can be made.
“If it’s less we will make necessary adjustments and if its small we will also ask for an additional amount so that we at least clear the local creditors, which are mainly the banks and maybe other utilities and companies.”
Merspin, which does not owe anything to foreign creditors was saddled with a $5 million local debt as at 2011.
At its peak, the textile firm employed about 1 000 people and as it emerges from the woods, the shareholders were optimistic that the turnaround strategy would be implemented in phases starting with creation of 100 jobs.
As the company gets recapitalised more jobs are set to be created in line with its operational capacity.