Local firm ABWA undergoes rescue process
Diversified Zimbabwean investment company ABWA Holdings, which has interests in farming, healthcare, and property sectors, has been placed under a voluntary corporate rescue, a local bankruptcy protection process, after becoming technically insolvent.
ABWA’s subsidiaries that have been placed under corporate rescue in terms of the Insolvent Act are ABWA Poultry, Dairy, Meats, Health, and Properties. Mr Knowledge Hofisi of Aurifin Capital has been appointed Corporate Rescue Practitioner (CRP).
Its operations are governed by different regulations depending on the specific activities, with the Collective Investment Scheme Act one among other legal frameworks.
A collective investment scheme is run by an entity that allows investors to pool their money and invest in the pooled funds, rather than buying securities directly as individuals. Generally, these are managed by a fund management company that is paid a fee for doing so.
“I take this opportunity announce the companies’ proactive decision to initiate corporate rescue proceedings, effective 27 May 2024,” said Mr Hofisi in an interview yestersday, after this publication enquired about the State ABWA operations.
“This significant step underscores our commitment to overcoming financial distress and securing a future that is not unreasonable for all stakeholders, including investors.
“Over the last eight years, the practitioner has acquired a significant appreciation of asset management operations through managing various unit holders’ investments in an asset manager.
“The practitioner believes the collective investment scheme will regularise these legacy issues through an acceptable legal framework that will help restore confidence in the investing public,” he added.
Corporate rescue proceedings offer a lifeline to financially distressed companies. The proceedings involve placing the company under the temporary supervision of a court-appointed CRP.
The CRP manages the company’s affairs, business, and property during this period.
One key benefit is a moratorium on creditors’ claims. This provides a crucial breathing space for the company to develop a rescue plan without facing immediate legal action.
A successful rescue plan, if approved by relevant parties, can completely revitalise the company.
It can involve restructuring the business, property, debt, and other financial aspects.
The comprehensive overhaul paves the way for a more secure and sustainable future for the business. The CRP plays a vital role throughout the process. They manage the day-to-day operations and ensure compliance with all relevant regulations.
The boards of the companies under corporate rescue are deemed dissolved by operation of law. Each director can only exercise a management function per the corporate rescue practitioner’s express instructions or direction, to the extent that it is reasonable to do so.-herald
