Old Mutual relaxes distressed industries facility

via Old Mutual relaxes distressed industries facility | The Herald 3 July, 2014

Industry and Trade minister Mike Bimha has said Old Mutual Zimbabwe has agreed to relax terms and conditions enshrined within the Distressed Industries and Marginalised Areas Fund that were regarded as too restrictive for ailing companies.
The minimum requirements for companies to qualify to access the funds included two years accounts in the form of management accounts or financial accounts, acceptable collateral, clean tax records, projections for capital expenditure loans, budgets and cash flows, among others.

Old Mutual and the Government signed a memorandum of understanding to set up a $40 million revolving fund with each party contributing $20 million meant for the resuscitation of ailing companies.

Minister Bimha while making a presentation before Parliamentary Portfolio Committee on Industry and Commerce said there is an acknowledgement that the industry is dead hence the need for recapitalisation.

“When CABS was given the role to administer the fund they laid down terms and conditions but these conditions however proved tough.
“So Government engaged Old Mutual on the possibility of relaxing some of those terms and they agreed,” said Minister Bimha.

During the inclusive Government period, former Finance Minister Tendai Biti promised to put $5 million into DIMAF but the promise was never honoured and CABS did not stop but increased by $7 million to $27 million, the amount disbursed to date.

The money went towards 48 companies 26 of which are in Bulawayo and the remainder as shared among other provinces.

“The starting point is for them to relax some of the terms and conditions of DIMAF.

“Together we are looking at how we can enlarge the fund while Old Mutual will approach other financial institutions within and outside the country so that the fund can be more accessible to companies,” he said.

Companies hardest hit by economic challenges of the past decade are mainly located in Bulawayo, once the country’s light industry hub that employed thousands of people.

Minister Bimha said Government is also discussing with Common Markets for Eastern and Southern Africa for the setting up of a regional facility that will also attract the participation of regional players such as PTA and others with a view to providing more assistance to local companies.