GOVERNMENT’S plans to take over David Whitehead Textiles and Fresca Holdings (Fresca) are now at an advanced stage following revelations that due dili
gence exercises into the two financially-distressed firms have been completed.
The due diligence exercises were carried out by state-owned Industrial Development Corporation (IDC), apparently on behalf of the Industry and International Trade ministry.
“The due diligence exercise has been completed,” said Pias Munemo, IDC’s projects development executive.
“The due diligence was carried out on behalf of the Ministry of Industry and International Trade,” Munemo said, confirming government’s intentions to take over David Whitehead and Fresca.
Munemo said they had already submitted the report on the due diligence to the ministry but refused to give further details.
The IDC is set to acquire a 26% stake in each of Fresca and David Whitehead.
The parastatal stands to acquire higher stakes depending on the outcome of the due diligence.
In return, the IDC will inject fresh capital, including foreign currency, into the distressed firms.
Initially the IDC intended to also buy into National Blankets but later ditched the company from the list of prospective takeovers.
Both David Whitehead and Fresca recently shut down following salary and wage disputes between workers and management.
David Whitehead is currently under judicial management and is suspended from the Zimbabwe Stock Exchange.
However, some ruling party politicians are reportedly trying to wrestle ownership of the company from current shareholders. They are understood to have stoked the dispute between management and workers at David Whitehead.
Fresca, however, was reportedly opened following orders by Industry and International Trade minister Obert Mpofu.
IDC is the holding company of Willovale Mazda Motor Industries and Amtec.