Merlin seeks $5m working capital

Published: 30 March 2018
BULAWAYO-BASED textile firm, Merlin has applied to Government for $5 million financial assistance as working capital in the short to medium term.

Presenting the company's progress report to creditors in Bulawayo on Wednesday, the company's judicial manager Mr Cecil Madondo said the company's needs $5 million to boost its production capacity to close to full throttle.

The company applied to the Ministry of Industry, Commerce and Enterprise Development for funding, and Mr Madondo told the creditors that the Government was looking into the request and pledged to assist the company in its endeavors.

"A meeting was set up with the Permanent secretary in the Ministry of Industry, Commerce and Enterprise Development on March 21, 2018 during which the Government pledged unlimited support for Merlin.

"An injection of $5 million will go a long way in reviving operations at Merlin and will augment efforts from the workers and other local partners who have been assisting in mobilising resources for the company to resume production," he said.

Mr Madondo said the $5 million working capital will cover the short to medium term plan.

Merlin needs $30 million capital injection in the long-term to operate at full throttle and is in discussion with an unnamed strategic investor with capacity to implement the long-term plan.

"The investor would then be required to purchase land and building, replace the obsolete plant with new state-of-the-art machinery and also set up a ginning plant to complete the production cycle," he said.

The firm, which is one of the oldest textile companies in Bulawayo resumed production in February this year having been closed down since 2012 when it was placed under judicial management.

Mr Madondo said the company will start making notable progress in terms of meeting market requirements and generating income within three months after resuming operations.

Last month, Merlin announced that it was re-opening following the implementation of a business rescue strategy involving immediate injection of $2.1 million minimum working capital by one of the firm's creditors.

Water, which had been disconnected at the factory, has also been reconnected by Bulawayo City Council. Payments for the resuscitation of boreholes at the factory in a bid to ensure the utilisation of the company's internal resources to reduce water consumption costs have been made.

Repair and maintenance works at the Bulawayo factory were in full swing across various departments in readiness to resume full-scale production, which will get underway as planned.

The company has so far hired about 100 workers.

Merlin was established in the 1950s and during its glory days used to employ over 1 000 people. 
- zimpapers
Tags: Merlin,


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