Govt to recapitalise distressed Telecel
THE Government is working on recapitalising Telecel Zimbabwe and being the largest creditor and shareholder, has no intention of calling its debt, court papers show.
In an application seeking leave to file a supplementary affidavit opposing an order being sought by the workers to have the country’s smallest mobile telecommunications firm placed under corporate rescue, Telecel chief executive Angeline Vera says the Government has assured the company that it has no intention to call its debt.
In the application, Ms Vera also argues that some procedures have been violated in lodging the matter before the court by the Communication Allied Workers Union of Zimbabwe (CAWUZ) while maintaining that Telecel has been unable to pay its debts “as bluntly” stated, other creditors would have supported the application by workers.
Telecel, she argues, has taken measures to secure its continued viability by entering into payment plans with creditors and “for this reason…is not in financial distress.”
In October last year, CAWUZ lodged an application to have Telecel placed under corporate rescue, a 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 potential 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.
In the application seeking leave to file the supplementary affidavit, Ms Vera says Telecel has obtained confirmation from Government, its major creditor, and shareholder that it has no intention to request the company to pay what may be due to them.
“Significantly this creditor has not been approached by the Master (of the High Court) for his consideration and input. Nor has the applicant bothered to notify this affected person.”
A letter attached to the application by Information & Communication Technology, Postal and Courier Services Minister Jenfan Muswere, says the Government is working on restructuring the company.
“Reference is made to the court application for Corporate Rescue filed by the Communication and Allied Service Workers Union Case No. HCHC306/22, which was brought to our attention,” said Minister Muswere.
“As you are aware the Government of Zimbabwe has a controlling interest in Telecel Zimbabwe (Pvt) Ltd. The majority of its liabilities are owed to the Government.
“This letter serves to confirm that the Government of Zimbabwe has no intention of calling the debt and is currently in the process of putting together resources to support, secure investment, restructure and recapitalize the business.”
However, in its opposition, CAWUZ argues that “with respect to the Minister of Information and Communication Technology, Postal and Courier Services, assuming that Telecel owes the State, which is at variance with the position obtaining on the ground, it follows that the provisions of the Reconstruction of State Indebted Insolvent Companies Act would apply, similar to Hwange Colliery Company which is under reconstruction.”