HARARE, Mar. 7 (NewsDay Live) – Westend Foodworld Investments (Private) Limited, one of the leading retailers in Zimbabwe, has been placed under corporate rescue amidst financial difficulties.
The company’s board of directors filed a resolution with the Master of the High Court on February 17, 2025, to initiate corporate rescue proceedings under the Insolvency Act.
“The Board of Directors (the Board) of Westend Foodworld Investments (Private) Limited (the Company) wishes to advise that on the 17th of February 2025, it filed a resolution with the Master of the High Court to place the Company under corporate rescue in accordance with the provisions of the Insolvency Act [Chapter 6:07],” read the statement.
“The purpose of corporate rescue proceedings in terms of the Insolvency Act, is to facilitate the rehabilitation of a company that is financially distressed by providing for, amongst other issues an opportunity for the company to come up with a corporate rescue plan, to restructure its affairs, business, property, debt and other liabilities, and shareholder equity in a manner that enables the Company to trade out of its difficulties and continue on a solvent basis.”
The company also noted that it has faced considerable challenges in meeting some of its obligations to creditors as and when they fall due.
“Subsequent to the placement of the company in corporate rescue, Mr. Alexious Dera of Moore PNA Zimbabwe was appointed as the Company’s Corporate Rescue Practitioner. The Master of the High Court subsequently granted authority to the Company to serve this notice on all affected persons by the 07th of March 2025,” he said.
“During the corporate rescue proceedings, no legal proceedings, including, enforcement or action against the Company, or concerning any property belonging to the Company or lawfully in its position, including any third party stop and assets may be commenced or proceeded with in any form without the authority of the Corporate Rescue Practitioner and leave of the High Court of Zimbabwe.”
It said that the mismatch in currency inflows compared to the currency of payment and the devaluation of the local currency meant that the Company could no longer service its United States dollar debts as and when they fell due.
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“In placing the Company in corporate rescue, the Board has carefully considered that, over the past twenty-four (24) months, the Company has faced considerable challenges in meeting some of its obligations to creditors as and when they fall due. This has primarily been necessitated by exchange rate volatility and competition from unlicensed retailers who are under-cutting prices,” it read.
“Since Q3 of 2024, the business implemented a cost containment and restructuring exercise which resulted in the reduction of USD obligations, the movement of settling of obligations primarily in ZiG and the disinvestment in non-core assets to provide further equity to fund the company’s recapitalization efforts.”
It also noted that the Company has valuable assets and strong market share in the retail sector and as a result, there are opportunities to tap into and resolve its cash flow challenges.
“Interventions by the Government of Zimbabwe in the past few months in curbing the illicit flow of irregularly imported goods by unregistered retail shops and individuals will assist the formal retail sector to retain its competitive advantage. On account of the above and in order to provide the Company with an opportunity to recover and be restored to a sound financial footing, the board resolved to place the company in corporate rescue with effect from the 25th of February 2025,” said the company.
“It is the board’s belief that the corporate rescue process with the assistance of the Corporate Rescue Practitioner will facilitate a restructuring of the Company, its balance sheet, and cash flow in a manner that will return the Company to financial viability. It should be noted that all of the Company’s branches remain open, for trade with our suppliers and retail customers going forward.”
Food World is the latest casualty of the turmoil among retailers that has seen OK Zimbabwe, Spar Zimbabwe, and N. Richards among others closing some of their branches and Choppies exiting the country.
