HARARE – Wholly-owned Sub-Sahara Capital Group (SSCG) subsidiary, Gain Cash & and Carry has taken over insolvent Metro Peech & Browne, one of the largest wholesale companies in the country for US$13,5 million.
The deal was sealed late last year and this was confirmed by Metro Peech’s Corporate Rescue Practitioner, Oliver Mtasa in an exclusive interview with The Mirror.
Metro Peech shareholders are Spear Africa Holdings of Mauritius (39,2%), Midosa Investments, a Zimbabwean company (40,8%) and Andrew Sean Baker a natural person and owner of Metro Peech and Brown.
Some factors leading to insolvency included the conversion of bank loans (US$5 million loans) from $ZWL to US$ which led to the ballooning of the debt, disparities on the black market vs interbank rate, competition from the black market, top-heavy structure and subdued governance systems and structures.
Companies owed by Metro Peech included manufacturers, estate agents, local authorities, media companies and shareholders through loans.
Metro Peech was technically insolvent as of July 31, 2023, with a negative net asset value of US$8,878,492. It also had a negative net asset value of US$12,631,411.
Metro Peech was first opened in Masasa in 2010 and it had 13 branches in major towns throughout Zimbabwe by the time it went under rescue operation last year. On 24 August 2023, the board made a special resolution to voluntarily Place the company under rescue management.
The company at that stage failed to pay bank loans and interest. It had a high gearing ratio. It could not pay rentals, staff salaries and meet Statutory obligations. It had inadequate working capital.
The struggling company has been unable to pay its 497 employees, their salaries on time since August 2023 and paying 50% of NEC rates and also failed to settle rentals.
“SSCG is already invested in a wholesaling business in Gain Cash and Carry (“Gain”) and the acquisition of Metro Peech & Browne will result in positive synergies taking place. It will inject a minimum of US$8 million as working capital and settle US$390,200 for Corporate Rescue Practitioner fees and legal fees including the Master’s fees.
SSCG also acquired Metro’s Non-Current Assets that included land and three buildings in Mutare, Masvingo, Chiredzi and a piece of land in Marondera as well as Motor Vehicles, Computer Equipment, Furniture and Fittings for US$4,909,981.
SSCG is a significant player in the Zimbabwean market with investments in Wholesale and Retailing. Gain Cash and Carry boasts of over 60 outlets nationwide.
