As first reported by Business Weekly, one of Zimbabwe’s leading news site, Metro Peech & Browne, one of the largest wholesalers in Zimbabwe, has been placed under corporate rescue due to insolvency this week.
The appointed administrator, Oliver Mtasa of Crowe Advisory, reported that the company is technically insolvent to the tune of USD 8,878,493, which is the major cause for corporate rescue. At the time of filing, the company had assets of USD 12.8 million and liabilities of USD 21.7 million, leaving a gap of USD 8.8 million.
The company owes USD 9,835,088 to suppliers, USD 5.4 million to banks, and USD 5 million of intercompany and other liabilities.
It also owes staff USD 229,000 in unpaid salaries.
The company was formed in 2007, and its first store opened in Msasa, with 19 more branches following.
The company quickly grew due to the demand for affordable and bulk basic commodities.
But the back story for us is that back in 2013, Spear Capital, a Norwegian private equity fund, invested in the company, putting in capital and taking up 39.2 percent of the shares and who may potentially be sitting on a further write off due to ownership of an underlined supplier.
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Does this mean a double hit for Spear Capital who also potentially own Greenwave owed $5mil?
A new investor could mean Spear Capital selling some of its shareholding but is it going to be a major hit for Spear either way with speculation that it’s a double whammy due to their potential underlined ownership of a key supplier called Greenwave which Metro Peech owe $5 million?
This line in the story is highlighted on Twitter by Tinash M and appears to be both credible and based on what appears to be publically available data that shows both the debt and the shared owership by Spear in both companies.
With jobs at risk we hope for some sort of positive outcome and will update as the story develops.
