THE Cotton Company of Zimbabwe (Cottco) has initiated processes to place the organisation under corporate rescue and appoint a corporate rescue practitioner. This comes as the 2026 cotton marketing season begins this month.
Corporate rescue is a formal legal process aimed at rehabilitating a company in financial distress and preventing insolvency.
It provides a temporary, structured framework for an ailing business to reorganise its operations and debts in order to restore viability.
A qualified, independent corporate rescue practitioner (CRP) is appointed to take over the management of the company from the existing board and directors.
Cottco board chairman Mr Sifelani Jabangwe said the decision to place the entity under corporate rescue was intended to strengthen the company, recapitalise the business and restructure its operating model so that it can continue playing a critical role in achieving Vision 2030.
“Since 2016, when Cottco’s resuscitation was supported by the Government, Cottco has had a weak balance sheet such that it required guarantees to secure loans to fund annual cotton crop cycles. Legacy debts further accrued as a result of the El Niño drought of 2024, where the national cotton crop production dropped to its record lowest of about 12 000 tonnes with Cottco’s intake at 9 900 tonnes,” he said.
Mr Jabangwe said the intake fell below the organisation’s break-even level, resulting in the accumulation of debt. To clear these legacy arrears, Cottco needed to undertake a capital-raising exercise.
“This process was delayed due to the backlog in audited accounts, which occurred between 2015 and 2019 when Cottco did not have a board. The accounts have now been updated to 2023 with 2024 and 2025 accounts expected by September 2026,” he said.
Mr Jabangwe said that although the process was only six months from completion, some creditors had grown impatient and were seeking to attach the company’s assets.
“So, to protect Cottco assets and allow for the capital raising exercise, the board resolved to place the entity under corporate rescue as attachment of its assets would have done harm to the prospects of Cottco and the country at large,” he noted.
When the Presidential Cotton Input Scheme was introduced in the 2015/16 agricultural season, with a US$28 million input package as a subsidy to farmers, Cottco was assigned to administer the initiative. The proportion of Government to private sector financing of the cotton industry, which stood at 65 to 35 percent at the inception of the Presidential Input Scheme, has widened to 84 to 16 percent since the 2022/23 season.
An insider privy to the developments, who requested anonymity, confirmed that the Cottco board had adopted a resolution to place the company under corporate rescue in terms of the Insolvency Act (Chapter 6:07). The resolution took effect on April 28, 2026, and was duly filed with the Master of the High Court and the Registrar of Companies and Other Business Entities.
According to documents seen by insider sources, two individuals have already been appointed as corporate rescue practitioners.
A copy of the board meeting minutes held on April 29 reads: “The company is financially distressed as it is struggling to meet its obligations to creditors as and when they fall due for payment.
The challenges are driven primarily by severe liquidity constraints, lack of working capital, high debt and delayed farmer payments. These issues have resulted in substantial arrears to farmers, declining production and reliance on state-backed input schemes for survival.”
Cottco is a subsidiary of the Mutapa Investment Fund (MIF).
MIF, the country’s sovereign wealth fund, has an extensive portfolio that includes NetOne, the National Railways of Zimbabwe, ZimRe Holdings, Zimbabwe Power Company, Powertel, Allied Timbers, Telecel Zimbabwe, Air Zimbabwe and the Industrial Development Corporation, among others.
Last year, MIF pledged to clear Cottco Holdings’ legacy debts, totalling approximately US$5 million, over six months.
Cottco’s debt clearance was expected to restore financial stability, streamline operations and boost confidence across the cotton industry.
Cottco is the largest cotton contractor in the country.
Agriculture, Water, Fisheries and Rural Development Permanent Secretary Professor Obert Jiri also confirmed that Cottco had been placed under corporate rescue, but allayed farmers’ fears that this would not disrupt the 2026 cotton marketing season, which starts this month.
Meanwhile, the 2025/26 Crop, Livestock and Fisheries Assessment report (Clafa 2) revealed that cotton production increased by 26 percent, driven by an expansion in planted area to 154 938 hectares in the 2025/26 season from 122 493 hectares in 2024/25.
The Presidential Input Scheme targeted 520 000 households for cotton production.
A tracking system for farmer utilisation of inputs will ensure the gradual transition of the Presidential Cotton Scheme into a fully recoverable model by 2027.-herald
