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Metro Peech owes US$21,7m

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Metro Peech owes US$21,7m

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GARIKAI MAFIRAKUREVA

HARARE- One of the biggest wholesalers in Zimbabwe, Metro Peech & Browne Wholesales (Private) Limited, was declared technically insolvent and the company has a negative net asset value of US$8,878,493 leaving the jobs of 497 employees hanging in the balance.
According to a Corporate Rescue First Report released by Oliver Mtasa the Corporate Rescue Practioner of Crowe Advisory (Private) Limited to the Master of the High Court after a creditors meeting held on September 20, 2023, a myriad of problems led to the company’s financial distress.
The company has US$12.8 m assets which are outweighed by its liabilities totalling US$21.7 m that were broken down showing it owes suppliers US$9,835,088, banks US$5.4 m, intercompany and other liabilities US$5m and has salary arreas of US$ 229,000.
The report seen by The Mirror shows that, lack of adequate governance structures and systems around financial discipline, poor servicing of liabilities resulting in suppliers holding back supplies, heavy overhead structure, stockouts, competition from the informal sector which is not subject to similar regulatory compliance and rapid expansion without adequate capital were some of the problems bedevilling the ailing company.
“At the time of placement of the company under corporate rescue, the company was paying 50% below NEC rates and was unable to pay staff salaries on timei It was also unable to settle rentals as they fall due. The company faces skills flight following salary cuts. The company has a total headcount of 497 staff comprising 392 NEC staff and 105 Managerial staff.
“Conversion of bank loans from ZWL to US$ which led to ballooning of the debt and interest payment. The company negotiated for the Reduction of interest payments to financial institutions. Inadequate capitalization resulting in negative cashflows.
“Inadequate stocking level for the market leading to stock outs and loss of customers Continued disparity on the black-market vs interbank rate exchange rates to the ZWL/US$ have affected stock valuations,” reads part of the report.

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