ABWA Holdings, a diversified investment company in Zimbabwe with interests in farming, healthcare, and property, has entered voluntary corporate rescue due to technical insolvency.
Several ABWA subsidiaries, including ABWA Poultry, Dairy, Meats, Health, and Properties, are now under corporate rescue as per the Insolvency Act. Mr. Knowledge Hofisi of Aurifin Capital has been appointed as the Corporate Rescue Practitioner (CRP).
ABWA Holdings operates under various regulations depending on their activities, including the Collective Investment Scheme Act. A collective investment scheme allows investors to pool their money and invest collectively, managed by a fund management company for a fee.
“I announce the companies’ proactive decision to initiate corporate rescue proceedings, effective May 27, 2024,” said Mr. Hofisi in an interview. “This step underscores our commitment to overcoming financial distress and securing a sustainable future for all stakeholders, including investors.”
Mr. Hofisi highlighted the significance of this decision, noting his extensive experience in managing investments and his belief that the collective investment scheme will help resolve legacy issues and restore public confidence.
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Corporate rescue proceedings provide a lifeline to financially distressed companies, placing them under the temporary supervision of a court-appointed CRP. The CRP manages the company’s affairs, business, and property during this period. One key benefit is a moratorium on creditors’ claims, giving the company time to develop a rescue plan without facing immediate legal action.
A successful rescue plan, if approved, can revitalize the company by restructuring its business, property, debt, and other financial aspects, paving the way for a more secure future. The CRP plays a crucial role in this process, managing day-to-day operations and ensuring compliance with all relevant regulations.
Under corporate rescue, the boards of the companies are deemed dissolved by law. Directors can only exercise management functions according to the CRP’s instructions, ensuring that all actions taken are reasonable and aimed at the company’s recovery.
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