Firstel struggles to service a $12m debt, apply for liquidation

via Firstel struggles to service a $12m debt, apply for liquidation – NewsDay Zimbabwe April 11, 2016

LOCAL telecommunications firm, Firstel Cellular, has approached the High Court seeking an order for provisional liquidation after being inundated by debts amounting to $12 million.


Firstel company secretary Tamuka Madzore, in an application filed in February, urged the court to consider their application arguing the firm was in dire need of assistance.

“The application is being made for the reasons that the applicant is unable to pay its debts. The applicant currently has liabilities in the sum of $11 821 056, 93 of which the sum of $11 245 805, 23 is owed to one creditor,” Madzore said.

“The applicant has failed to pay off these amounts and is no longer in operation as it has closed most of its branches throughout the country, leaving only the head office in Harare.

Resultantly, the applicant is not able to service its debts. It is for these reasons that the board of directors has resolved that the company be placed under provisional liquidation.”

Madzore said although Firstel, by August 18 last year, had $9 098 044,26 owing to it by debtors, the amount, even if it was collected and ploughed back into the business, would not bring hope of recovery as the firm’s debts far exceeded the amount owed to it.

“The applicant has ascertained that Regatta Financial Advisory Services (Pvt) Ltd is able and willing to serve and is not disqualified from appointment under provisions of the Companies Act, (it should, therefore,) be appointed as applicant’s provisional liquidator with the powers to exercise discretion all the powers set out in the Companies Act,” Madzore said.

He also said Firstel had further provided due security for the payment of all fees and the charges necessary for the prosecution of all proceedings until the appointment of a liquidator of the company. The application is pending at the High Court.