Merlin secures US$30m Japanesse investment

via Merlin secures US$30m Japanesse investment 11/12/2014

BULAWAYO based textile firm Merlin has secured an investor to pour in $30 million to resuscitate operations at the troubled textile company, major shareholder Delma Lupepe has said.

The company was placed under provisional judicial management in 2011.

Last month, one of the firm’s major creditors, Old Mutual successfully applied for removal of Merlin from judicial management citing lack of progress in the resuscitation of the company and failure by the judicial manager, Cecil Madondo of Tudor House, to turnaround the company.

One of the company’s shareholders, Delma Lupepe told The Source that they would resume operations in the first quarter in 2015.

“We have found a credible investor from Japan which I cannot name at the moment because of professional reasons,” said Lupepe.

“The investor will inject $30 million in Merlin for new equipment for spinning and weaving as well as manufacturing of diapers and women’s sanitary wear.”

He said the first phase of Merlin revival would involve repairing the existing plant equipment using spares sourced from Europe.

“The shareholders’ resuscitation plan will see the first phase involving repairing the equipment from spares at hand over the shut-down period.

“We’ll start operations in the first quarter of next year and the repayment of creditors is expected to begin in the third quarter,” he said.

Merlin plans to acquire new equipment by the end of the third quarter in 2015 with installation expected to take between six and nine months after which the firm would have the capacity to produce more than 250 tonnes of product per month.

“We’re looking forward to gradually employing 100 people in the first phase and by the end of the second phase 400 workers would have been hired,” said Lupepe.

At its peak Merlin, which produced towels and nappies, employed more than 1,000 workers.