Blue Ribbon faces liquidation

HARARE - Financially-troubled Blue Ribbon Industries (Bri) is facing possible liquidation after it applied to the High Court to be placed under judicial management for an indefinite period.

The company, which has a debt overhang of over $2 million, has been facing constraints due to lack of working capital.

Early this year the company sent most of its workforce on forced leave.

Bri, which operates five business units, saw its working capital eroded during the hyperinflation period between 2007 and 2008.

The liquidity crunch arising from the introduction of the multi-currency system created a further burden on the viability of the company.

The company’s efforts to raise working capital were unsuccessful due to high interest rates affecting its ability to operate profitably.

One of the leading grain millers in the country, Bri at one point had to close operations at its Bulawayo plant owing to funding constraints.

Judicial management is essentially a process that gives prime consideration to rescuing distressed companies as a going concern through the formulation and implementation of a reconstruction plan.

Analysts however, feel the company could be declared bankrupt as it has struggled to pay its workers and operate efficiently.

In a notice yesterday the High Court, in terms of Section 299 (1) of the Companies Act (Chapter 24:03), appointed Reggie Saruchera of Grant Thompson Camelsa Chartered Accountants as the judicial manager.

“The judicial manager shall be entitled from the assets of the applicant companies, of the payment of remuneration at a rate to be determined by the Master of the High Court and to reimbursements of all out-of-pocket expenses incurred by him during the course of his duties,” read part of the notice.

Bri has a number of brands, including Blue Ribbon Foods, Nutresco Foods, Stockfeeds Unit, JA Mitchells and Bri Logistics.

Blue Ribbons Foods is one of the largest milling companies in Zimbabwe, known for such brands as Ngwerewere and Chibataura in the maize meal range and Blue Ribbon in the flour range.

Its stock feeds unit is involved in production and marketing of livestock feeds in addition to offering technical advice to customers.

It produces a wide range of broiler, layers and pig feeds.

JA Mitchells, incorporating Aroma Bakeries, is the group’s baking arm.

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