eBusiness Weekly
Business Writer
SOME retrenched workers at Metro Peech & Browne Wholesalers Limited– currently under corporate rescue–a local form of bankruptcy protection are crying foul after their terminal benefits were cut by almost 70 percent.
Following Metro Peech & Browne Wholesalers’ restructuring and subsequent acquisition by new investor Heart Groove, several employees were left jobless. In the wake of the company’s “forced closure”, a controversial resolution granted retrenched employees only US32 cents for every dollar owed in terminal benefits.
“Due to the forced closure of Metro Peech & Browne Wholesalers under Corporate Rescue, the agreed Resolution was that all terminated employees will be entitled to US$0,32c per every US$1 that was due to them,” said Mr Oliver Mutasa, the corporate rescue practitioner of the company to one of the affected workers.
This has sparked outrage among affected employees, who argue that has left them facing financial hardship after losing their jobs. One former employee, speaking on condition of anonymity, expressed their dismay: “We dedicated years to this company, only to be thrown away with a pittance when they shut down.
“This isn’t just unfair, it’s cruel.”
The situation underscores the complexities and challenges faced by employees in companies undergoing corporate rescue. While the aim is to preserve companies and save jobs, employee rights, and financial security can often be compromised.
The case of Metro Peech & Browne also raises questions about the adequacy of terminal benefit provisions in Zimbabwe’s corporate rescue framework. Critics argue the current system falls short, leaving vulnerable workers exposed to significant financial losses.
Heart & Groove, a vehicle linked to a sub-Sahara Capital Group, the investment group that has interests in Gain Cash & Carry and Edgars took over Metro Peech and promised to inject US$13,5 million into a special purpose vehicle (SPV) to restart Metro Peech.
Corporate rescue practitioner Oliver Mtasa of accountants Crowe said it was considered more financially viable to commence a new venture, which would necessitate an estimated capital injection of around US$15 million.
At least 10 investors had shown interest in buying Metro Peech. According to Crowe, the bids were assessed “on the basis of both the financial and the qualitative factors for the provision of a sustainable business model going forward”.
Gain already has over 60 branches countrywide, and now adds Metro Peech’s 17 outlets to its network.
At the time of its entry into business rescue, Metro Peech & Browne’s financial position was precarious. While the company held assets valued at US$12.8 million while liabilities totalled a significant US$21,7.
The breakdown of debts revealed a heavy burden: US$9,8 million owed to suppliers, US$5,4 million to banks, and an additional US$5 million in intercompany and other liabilities. Moreover, the company was behind on staff salaries, owing employees US$229 000.
