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Metro Peech’s bankruptcy sparks debate

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Metro Peech’s bankruptcy sparks debate



HARARE- The major wholesaler, Metro Peech & Browne’s bankruptcy has opened floodgates of debates after Spear Capital, a Norwegian-linked Private Equity invested in Greenwave, a sister company of Metro Peech officially deemed bankrupt and filed for corporate rescue on August 24, 2023.
Greenwave Millings and Greenwave Trading were flagged as intercompany owed over $5 million by Metro Peech. Corporate Rescue Practitioner Oliver Mtasa of Crowe Private Limited confirmed that Spear Capital has 39 % shares in Metro Peech but said its investment in Greenwave does not affect Metro Peech.
“Yes, I can confirm that Spear Capital has shares in Metro Peech. What we are looking at right now is Metro Peech. As you know Greenwave operates independently,” he said. 
Metro Peech was Spear Capital’s first investment in 2013. Although the amount invested into the company when Zimbabwe dollarized is not disclosed, it is likely to have been around $5 million which is Spear Capital’s average investment size.
Metro Peech & Browne opened its first store in 2010 and grew rapidly to 18 stores across Zimbabwe. It has revenues of over US$70 million and was backed by a Private Equity (PE) firm, Spear Capital.
Spear Capital is reported to have targeted an Internal Rate of Return (IRR) of 20%-25% and a Multiple On Invested Capital (MOIC) of 2.5x – 3.5x which simply means if you invest $100 today you expect that investment to pay back $250-$350 in five years.
In 2020, however, Spear Capital managing partner Martin Soderberg, who sits on the Metro Peech board spoke about the investment.
“Metro was our first investment in 2013. At the time, Zimbabwe was a US dollar-based economy, and things were going well. Metro had revenues of about $70 million and it has grown significantly every year since then.
“Since then everything has been murky. In 2018 for example, all companies reported in US dollars but were trading in local currency. It has made it difficult to work out how well the business has been performing,” he said.
In select SADC countries, Spear Capital provides capital to high-growth SMEs to help them expand and make a positive impact on their communities. They also have on-the-ground experience in the region which allows them to help our investors enter the region most efficiently. This experience also ensures that they provide these investors with value beyond simple financial returns.

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