Karina Textiles (Pvt) Ltd first auction to dispose of its Mutare Complex hit a brick wall after failing to attract a potential bidder with the required amount, The Worker has learnt.

Karina was officially placed under liquidation in 2013 and has been on offer since then but has struggled to secure investors.

Theresa Grimmel, the provisional liquidator, seeks to dispose the company for $3 million to settle creditors’ arrears but the recent auction only attracted three bidders with the highest offering $1, 4 million.

In a statement, the liquidator said some of the company’s movable assets in Harare and Mutare were already auctioned.

 ‘’The assets were on offer continuously from the time of final liquidation; they were advertised locally, regionally and internationally. The movable assets such as motor vehicles and office furniture from Harare have been sold by public auction, as have the motor vehicles from Mutare which was sold by private treaty,’’ said Grimmel.

 ‘’This development is saddening. We had preferred the factory to be auctioned to an individual as one entity since in normal circumstances that way fetches more money which would go a long way in paying up creditors. The situation now is an indication that it is no longer safe for some creditors that they may not get anything. We still hope the company will find a potential bidder,’’ said a former managerial employee with the firm who preferred anonymity.

One of the company’s major creditors is Kingdom Bank (Pvt) Ltd which is owed a total of US$800 000.

It has been reported that the Liquidator was planning to set another auction date failure to which she intends to auction the plant’s assets in pieces.

Karina properties consist of the complex, with a large piece of land (partially undeveloped) together with the developed area which houses buildings for the yarn-spinning and carpet-making business.

Karina was initially liquidated on June 13, 2012 but the final order was granted on November 28, 2013 as there was opposition to the liquidation from the Zimbabwe Textile Workers Union (ZTWU) over the preferred judicial manager.

ZTWU General Secretary, Silas Kuveya said Karina’s 666 workers listed as creditors are owed US$588 888, 47.

He expressed fear that the workers might be prejudiced if the company continue failing to attract an investor with the anticipated amount.

‘’The development that no suitable bidder is coming forth to purchase the company is now treacherous for workers. This is because workers are listed to be paid once the Complex in Mutare is disposed of. We still press our hope that the company would find a potential buyer as a single entity. In liquidation, proceedings are not favourable for workers since they are not categorised as preferred creditors in the process. That’s now our fear that if it so happens that the liquidator dispose the factory in pieces, the amount realised may not be enough to cover all creditors with workers included,’’ he said.

The liquidator was yet to confirm a new date for the second auction by the time of going to print.

Meanwhile, Karina Textiles’ demise is one of the major indicators of the massive industrial collapse experienced in the eastern border city in the past decade, following the closure of Mutare Board and Paper Mills (MBPM) - with both companies recorded to have thrown more than 5000 workers into the streets.  The company, which is the country's sole manufacturer of knitting yarn, was one of Mutare's top employers with over 1 000 workers at its peak.