By Jabulani Khumalo
The Cotton Company of Zimbabwe (Cottco) Thursday released cautionary statement to its shareholders on the possibility of the government taking over acquire a controlling stake in the company.
This follows the company’s application for voluntary suspension of trading in its shares from the Zimbabwe Stock exchange (ZSE) in November 2014 and also applied for provisional judicial management due to failure of debts settlement.
The acting Company Secretary Jacqueline Dube said following company cautionary statement said the company had since applied for a voluntary suspension of trading in its shares from the Zimbabwe Stock Exchange (ZSE) in November 2014 following the Company’s application for provisional judicial management on the 5th of November 2014.
“Cottco Holdings Limited (“Cottco” or “the Company”) applied for the voluntary suspension of trading in its shares from the Zimbabwe Stock Exchange (“ZSE”) in November 2014 following the Company’s application for provisional judicial management on 5thNovember 2014.”
“The application for provisional judicial management was necessitated by the Company’s failure to settle debts amounting to circa US$56 million following its failure to recover the costs of inputs supplied to contracted cotton farmers due to massive side marketing” she said
She also added the company is that taking advantage of the Presidential Inputs Scheme the government introduced on the company’s operations and processes.
“Following the Company’s aforesaid application for provisional judicial management, the Government of Zimbabwe (“GoZ”) intervened through the introduction of the Presidential Inputs Scheme (“PIS”) in 2015 in consideration of the withdrawal of the application for provisional judicial management by the Company.
“In 2016, the GoZ facilitated the restructuring of Cottco’s debt through the Zimbabwe Asset Management Company (“ZAMCO”). In support of the PIS and in order to buttress viability, the GoZ introduced a cotton subsidy scheme in terms of which ZWL$1.5 billion and ZWL$2.5 billion were committed in 2020 and 2021 respectively” Dube further explained.
