Mozambique: Cotton company leaves debt in four banks – Lusa

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Mozambique: Cotton company leaves debt in four banks – Lusa

4:42 CAT | 21 Jun 2023

File photo: Lusa

Plexus, one of the main cotton sector companies in Mozambique, which operated in Cabo Delgado, left recovery plan debts of around 515 million meticais (€7.2 million), an announcement published today reads.

The notice from the Judicial Court of Cabo Delgado dated 5 April appears two and a half months later in Noticias, Mozambique’s main daily newspaper, after the government had already announced in May that it was looking for investors to take over the cotton fields.

The court asks “creditors not indicated by the debtor” to present their claims, and displays a table with known debts, 95% of which are to four banks: Moza Banco, BCI, Access Bank and Societe Generale.

Moza is owed 197 million meticais (€2.7 million), BCI 127 million (€1.7 million), Access 110 million (€1.5 million) and Societe Generale 58 million (€813,000).

In addition to the banks, 3.4 million meticais (about €48,000) of unpaid salaries are identified, while the remaining debt identified is owed to the tax authorities and social security.

In the document, the British company cited the damage caused by cyclones and the impact of armed violence in Cabo Delgado to justify deteriorating financial performance since 2016 and the end of operations in the last year.

READ: Mozambique: British cotton company pulling out of Cabo Delgado – AIM report

It is estimated that around 200 workers have overdue wages and that 50,000 cotton farmers in Cabo Delgado have been struggling since 2022 to sell the raw material they previously delivered to Plexus.

Complementing the announcement made in May by the Minister of Agriculture, Celso Correia, according to whom contacts were underway to find new investors, the governor of Cabo Delgado, Valige Tauabo, also said this month on a visit to Montepuez district, where Plexus was headquartered, that efforts are under way to revitalize the sector.

One of the tools will be a public tender to identify interested companies with proven technical capacity to promote cotton cultivation in the country.

Source: Lusa