ZIMBABWE – Marvo Stationery Manufacturers, a former stationery manufacturing giant, is locked in discussions with two unnamed investors wishing to pour in US$1,5 million to revive production, reports News Day.
Marvo Stationery was placed under judicial management in September 2014, as it struggled to settle a debt of about US$2,5 million accrued after failing to pay its creditors and a huge wage bill backlog.
Several efforts to revive the company fell through, with judicial manager Chrispen Mwete, of C Mwete and Company, saying foreign investors were pulling out because of lack of clarity on dividend repatriation.
“On Marvo, we are still working on raising capital. We have two prospective investors, one local and the other from outside the country. We have sent them what they want and we are currently waiting for the feedback,” said Mwete.
“We are hoping to get feedback by Wednesday next week. We have not changed the position of what we want in terms of capital investment. We still need the US$1,5 million we have been talking about. This is because US dollar is a stable currency.”
Mwete said the company was currently not operating due to lack of capital.
“We tried to start operations on a small-scale and supplied the local guys, but due to the fact that they have not yet paid us, we have ceased operations. We have about six employees who are taking care of the situation, the rest of the employees are on unpaid leave,” he said.
In a report prepared in April 2015, Mwete alleged that Marvo Stationery directors swindled the company of more than $150 000, leaving it insolvent. The report also showed that the company’s directors failed to account for over $100 000 from the Distressed Industries and Marginalised Areas Fund loan
Mwete’s report revealed that of the $750 000 loan given to Marvo in 2012, $437 000 was used to settle a debt with ZB Bank, which in his view was abuse of the loan, which was meant for working capital and not to transfer risk from one bank to another.
Marvo, which was established in 1966 and employed 600 people at its peak, has struggled to compete with imported stationery largely because of its obsolete machinery.
Zimbabwe is going through a severe liquidity crunch, which has seen foreign companies struggling to repatriate their funds.