eBusiness Weekly
Business Writer
The High Court (Commercial Division) has set June 27, 2023, for hearing the application by Telecel Zimbabwe employees, through a workers union seeking to place the company under corporate rescue, according to a notice by registrar, Rekina Dzikiti.
In October last year, the Communication Allied Workers Union of Zimbabwe (CAWUZ) lodged an application to have the country’s third-largest mobile telecoms company placed under corporate rescue, a local form of bankruptcy protection.
CAWUZ represents the workers who are owed large sums of money in unpaid salaries. CAWUZ itself is owed some money in unpaid subscriptions, making it a creditor.
The basis for the application is that the company is financially distressed because it has failed to pay its debts.
It is submitted that, in spite of the apparent financial challenges, the company still enjoys some real prospects of being rescued from imminent collapse.
CAWUZ further submits that to save the company from liquidation, it must be placed under the supervision and management of a corporate rescue practitioner who must draw up a rescue plan to turn around its business.
Knowledge Hofisi of Aurifin Capital has been nominated as the corporate rescue practitioner.
CAWUZ contends Telecel has been on the brink of collapse for a long time now. It has demonstrated the company’s liabilities exceed its assets, an indication of insolvency.
But its financial woes “are not insurmountable” judging from the performance of the company’s competitors in the market.
Telecel, CAWUZ argues, despite insolvency, still enjoys some “realistic prospects of recovery if accorded an opportunity to do so.”
CAWUZ has also explored the “inexhaustible” business opportunities in the telecommunications sector and has used “this to demonstrate that the company has reasonable prospects of being rescued and of being a successful concern again.”
Telecel, however, opposed the application and challenged, among other things, the CAWUZ locus standi to take the application to the High Court. It contends that CAWUZ has no legal standing to bring the application as it is not an affected person in terms of the law.
While Telecel denied it was in financial distress, V Gapara, Master of The High Court (Additional Master)-Insolvency and Minors said it did not seem to disprove the fact that the company had been failing to pay its debts when they fell due and that it was still in debt.
Mr Gapara contended that it was clear from the founding papers, including the recent financial records, that the company was financially distressed.
Meanwhile, Telecel employees have declared incapacitation. According to insiders, May salaries are yet to be paid. The lowest-paid workers earn $70 000.
