gtag('config', 'UA-12595121-1'); Resuscitation of David Whitehead under threat – The Zimbabwe Mail

Resuscitation of David Whitehead under threat

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THE resuscitation of David Whitehead Textile Limited (DWTL) is under threat after a special mining grant encroaching the company’s properties in Chegutu, about 100 kilometers west of Harare was recently issued, Business Weekly can report.

Sources said the special grant (number 8934) was issued to Task Mining Syndicate amid concerns mining activities would disrupt the resuscitation of the former textile giant.

Task Mining Syndicate intends carryout mining operations for gold on area measuring about 10 hectares, according to the grant issued by the Secretary of Mines and Mining Development. The special mining grant expires on February 7, 2024.

Agri Value Chain Zimbabwe, a local company with diverse interests in agro processing owns about 70 percent stake in the company formerly owned by Lonhro plc.

The company is working on reviving operations, but the process is being slowed due to pending legal issues.

Within the vicinity of the mining grant, there are also operations owned by Agri Value Chain including a cotton ginnery, a cooking oil refinery and soya chunks processing plant.

“The major concern is that the mining operations have the potential to interfere with AVCZ operations and this threatens the revival of the textile company,” said one source who preferred not to be named.

“There has been a lot happening in terms of investments by Agri Value Chain Zimbabwe, not only the textile business but also in (cooking) oil refinery, brick manufacturing and soya chunks and concerns are that the mining operations could threaten all these investments.”

Efforts to get a comment from AVCZ proved fruitless.

David Whitehead judicial manager, Mr Knowledge Hofisi, was not immediately available for a comment.

Mines secretary Onesimo Moyo said was aware of the matter saying if there were any anomalies, they would be rectified.

“I am aware of the matter. I will have to check with the province (Mashonaland West province) to see if there are some anomalies. If that is the case, then that will be certainly rectified,” Moyo said.

Apart from Chegutu operations, AVCZ also operates a cooking oil refinery as well as margarine and washing soap plants in Harare. It also owns a cotton ginnery in Checheche.

DWTL used to play an integral part in the entire cotton value chain system in Zimbabwe. It was incorporated in 1951, with the name David Whitehead & Sons (Rhodesia) Limited. However, it changed its name to David Whitehead Textiles Limited in 1979.

It was registered on the Zimbabwe Stock Exchange in 1971. In 2002 Lonrho Africa disinvested from the textile industry in Zimbabwe and a DWTL management consortium, comprising senior managers, spearheaded the acquisition of 88 percent of the issued and fully subscribed ordinary share capital.

The acquisition was made through an investment vehicle called Guscole Investments. Guscole Investments comprised of Edwin Chimanye, Ernest Chivaura, Ian Cripps, George Maulidi, John James Fergusson, Oliver Gwaku and Ms Daphne Ritson.

In 2005, DW was suspended from the ZSE after failing to produce audited financials and regularising its shareholding structure in conformity with the listing requirements. Since then, the company remain largely under judicial management.

The long hunt for investor into David Whitehead Textiles ended in May 2019 after AVCZ bought 51 percent of the company and subsequently bought out some of the minority shareholders which saw the company raising its stake to 72 percent. The collapse of David Whitehead largely resulted from poor management and huge debts.

Source: Business Weekly