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Privatisation Commission reopens bidding for DWS
By
Ayam Maeresa - 20-08-2002 |
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The Privatisation Commission (PC), in a sec-ond attempt to market textile firm David Whitehead and Sons (DWS), yesterday opened up bids from investors interested in either acquisition lease, management contract or purchase of the shares in the firm.
The commission, which has engaged the services of Economic Resources Limited and Belmont Consulting of the United Kingdom for the firm’s privatisation, said the period to receive bids from interested investors will remain open until October 21.
Commission executive director Maziko Sauti-Phiri said in Blantyre on Friday that the desired mode of privatising DWS, which failed to attract any meaningful bids when government lined it up for sale in 1996, will be to attract a strategic equity partner to acquire the assets of the company.
“But we realise that due to the complicated and difficult position the company has found itself in, it may not be as easy to procure an investor willing to participate via an outright sale,” said Sauti-Phiri. “It continues to bleed, it’s indebtness is shocking and the state of its operating machinery is alarming,” he added.
Established as a subsidiary of Lonrho Malawi Limited in 1967 to serve the domestic market and to take advantage of export opportunities, DWS—whose 49 percent equity then was held by Admarc Investments before Lonrho withdrew—has sailed through problems since the market was liberalised in the early 90s.
With debts over K600 million, DWS has been insolvent for a very long time and continues to operate through budgetary subventions, leaving it with no capital to rehabilitate or expand its operations.
Treasury, according to the commission, provides K20 million monthly for operating costs.
“We have discussed all issues with the creditors and it’s agreed that privatisation is the only safe way because liquidation or receivership will not help anybody,” said Sauti-Phiri, adding that while the intention was to attract international investors of sound financial base, local participation would also be ideal.
Previously churning out 33 million linear metres of cloth annual in the early 90s, DWS now only produces 1.6 million.
Sauti-Phiri said the commission was optimistic that things will work out this timed around, especially given that there are opportunities for growth for company provided by both Sadc and Comesa free trade areas and the recent US’s Africa Growth and Opportunity Act (Agoa).
The company has already generated interest in Far Eastern investors in Hong Kong and Taiwan, said Sauti-Phiri.
DWS employs 2,000 people. |
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