Lawyers representing DWTL yesterday confirmed the withdrawal of the provisional liquidation.
Sources close to the company said it may once again be placed under a judicial manager — barely one and a half years after another judicial manager, Cecil Madondo of Tudor House, had completed the firm’s turnaround.
Judicial management entails reconstruction of a distressed company through the appointment of a judicial manager who assumes the roles and duties of a board of directors. The judicial manager formulates and implements a business turnaround strategy until a time when it is proper to hand it over to new management.
DWTL filed for provisional liquidation at the beginning of this month saying it could no longer meet its obligations including paying wages after the National Employment Council for the textile industry raised wages by 66%
An increase in electricity costs compounded the company’s financial difficulties since it is a heavy consumer of power.
Madondo was appointed the company’s judicial manager in May 2006 and two years later he had completed laying the groundwork for the resuscitation of operations at the firm.
It however turned out that his recommendations were not followed.
Workers have, since the filing for provisional liquidation, been pushing for its withdrawal saying there was hope that the company would be viable if management followed recommendations by Madondo.
“Workers want to save their jobs and they are saying the stakeholders must make an effort to resuscitate the company,” said Claudious Nhemwa of C Nhemwa & Associates, the legal practitioners who are representing the workers. “There is common agreement that we should save the company and strategies of saving the company are being discussed.”
In May last year the textile firm was on its way to recovery with Madondo publicly stating that it was a viable business.
“DWTL is a viable textile giant with very strong asset base, sound market share, massive plant and machinery, highly skilled manpower and distinct and sustainable competitive advantage in the textile industry in Zimbabwe and beyond,” said Madondo.
A direct injection of US$5,4 million, equivalent to 51% stake in DWTL by Elgate (an investment company which had won the bid for the stake) was supposed to be the first step towards the resuscitation of the company.