METRO PEECH & BROWNE WHOLESALERS

(PRIVATE) LIMITED
Under Corporate Rescue – CR9/23
Corporate Rescue Practitioner’s First Report to the
Master of the High Court

Return Date: 20 September 2023

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TABLE OF CONTENTS
INTRODUCTION ............................................................................................................................... 1
DISCLAIMER .................................................................................................................................... 1
EXECUTIVE SUMMARY ................................................................................................................... 1
1 INTERPRETATION AND PRELIMINARY ............................................................................. 3
2 COMPANY BACKGROUND ................................................................................................. 7
3 COMPANY INFORMATION .................................................................................................. 7
4 BRANCHES NETWORK..................................................................................................... 10
5 PROSPECTS FOR THE RESCUE OF THE COMPANY ...................................................... 12
6 STEPS TAKEN SINCE THE APPOINTMENT OF THE CRP ............................................... 14
7 SUMMARY OF THE CORPORATE RESCUE PROCESS ................................................... 16
8 THE PRACTITIONERS’ REMUNERATION ......................................................................... 17
9 CONSIDERED VIEW OF THE CRP IS THAT:..................................................................... 17
10 DECLARATION OF THE CRP ............................................................................................ 17

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INTRODUCTION

This is a Corporate Rescue First Report (“CRFR” or “the First Report”) for Metro Peech & Browne
Wholesales (Private) Limited (hereinafter known as “Metro Peech” or the Company”). This report
allows the Master of the High Court, Shareholders, and Creditors to consider and make an informed
decision on the Corporate Rescue process.

This Report contains information to the ongoing investigation of the affairs of the Company and
highlights some of the findings.

This Report has been prepared for presentation to all affected persons at the First creditors meeting,
Return date 20 September 2023

This Report has been prepared following the investigation conducted by the Corporate Rescue
Practitioner in terms of Section 134 of the Act1. The CRFR is divided into the following sections:

▪ Introduction, followed by the interpretation and preliminary section.

▪ The general background and statutory information of the Company, a summary of material events
in the Corporate Rescue proceedings, and the factors that resulted in the Company becoming
Financially Distressed and being placed under Corporate Rescue.

▪ The view of the Corporate Rescue Practitioner on the prospects for a successful rescue plan.
▪ Step taken since the appointment of the CRP.

▪ CRP's certificate: Attached hereto as Annexure A.

PURPOSE OF THE FIRST CREDITORS MEETING

(i) Submission of Proof of Claim Forms

(ii) Considered view of the Corporate Rescue Practitioner
(iii) Appointment of a creditors committee

DISCLAIMER

(i) CRP accepted and relied upon the representations and the authenticity of all documents provided
to him and his advisors. Should it become necessary to make representations and documents
referred to in this Report available in any legal proceedings connected to or arising from the
publication of this business rescue plan, the authors of or those with knowledge of the
representations and documents would have to confirm these in the legal proceedings.

(ii) Nothing contained in this Report shall constitute tax, accounting, or legal advice to any affected
person, and the CRP does not make any representations in respect thereof, other than as may be
expressly stated in this Report.

(iii) The CRP shall not be responsible for acts taken (or omissions) arising from any affected person’s
reliance on this Report.

(iv) The CRFR is not covered in the Act but provides an overview of the status of the company. If the
Master of the High court uses any or part of this report in making a decision, the CRP accepts to
conduct duties as directed by the Master within legal parameters.

1
Section 134: Investigation of affairs of company

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EXECUTIVE SUMMARY
Name of the Company : Metro Peech & Browne Wholesales
(Private) Limited (Under Corporate
Rescue) – CR 9/232
A considered view of the CRP : The company Metro Peech has reasonable
prospects of being rescued and the report
provides the recommendations for
consideration by the Master.
How the company became financially
distressed See Section 6.1.1 :
(i) Company is technically insolvent.
(ii) Inadequate capitalization resulting in negative cashflows.
(iii) High gearing levels. Impact of high interest rates and need for repayments.
(iv) Stockouts. Wholesale business is high volume, low margin.
(v) Heavy overhead structure.
(vi) Rapid expansion without adequate capital.
(vii) Poor servicing of liabilities resulting in suppliers holding back supplies and moving to
consignment stock.
(viii) Limited product lines/not stocking some high margin, fast moving product lines.
(ix) Competition from the informal sector which is not subject to similar regulatory compliance.
(x) Lack of adequate governance structures and systems around financial discipline (timeous
production of accurate financial reports and timeous payment of liabilities.

Critical Dates : See Section 7.2.1.3

Corporate rescue fees : Proposed agreement of CRP fees attached
as Annexure B
Statement of affairs as at the 31st of July 2023
Statement of Affairs (US$) USD
Assets
Non-Current Assets 5,871,311
Current Assets 6,954,894
Total Assets 12,826,205
Liabilities
Non-Current Liabilities (9,625,426)
Current Liabilities (12,079,272)
Total Liabilities 21,704,698
Net Liabilities* (8,878,493)

Note: The Company is technically insolvency to the tune of US$8,878,493. This was the major cause for corporate
rescue.
Material Assets of the Company
Assets Value (US$)
Motor Vehicles 394,436
Buildings & Land Purchase Costs 2,270,282
Computer Equipment 217,388
Office Equipment 2,426,157
Furniture & Fittings 209,684
Total Material assets 5,517,946
Non-material assets 353,365
Total Non-Current Asset 5,871,311

2
Website: http://www.metropeechandbrowne.com/

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Cash resources
As at Commencement of the corporate rescue (1/9/23), the Company had the following cash resources
ZWL1,024,613,601 and US$299,434.

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1 INTERPRETATION AND PRELIMINARY
The headings of paragraphs in this CRFR are for convenience and reference only and shall
not be used in the interpretation of or modify or amplify the terms of this CRFR nor any
paragraph hereof. Unless a contrary intention appears:

1.1 words importing: –

1.1.1 any one gender includes the other gender;
1.1.2 the singular includes the plural and vice versa; and
1.1.3 any person includes a natural or juristic person, firm, company, corporation, government,
state, agency or organ of state, association, trust, or a partnership (whether having separate
legal personality);
1.2 The following terms and/or expressions shall have the meanings assigned to them hereunder
and cognate expressions shall have corresponding meanings:–

1.2.1 “Advisors” means the advisors to the CRP, namely Raymond Sibanda of Crowe Advisory
(Private) Limited and Tatenda Mawere (Mawere & Sibanda) and their respective employees
or representatives retained by the CRP;

1.2.2 “Affected Person” or “Affected Persons” shall bear the meaning ascribed by the Act and,
concerning the Company, means Shareholders, Creditors, Employees (including labour
brokers) and any registered trade union representing employees of the Company;

1.2.3 “CRP” means the corporate rescue practitioners appointed in terms of Section 122 of the
Act, being Oliver Mtasa, operating from premises situated at 142 Mutare Road, Msasa, Harare

1.2.4 “Business” means the Metro Peech & Browne Wholesalers (Private) Limited whose
objectives is offering affordable, top-quality bulk and prepacked basic commodities to its
valued customers locally and across the country’s borders;

1.2.5 “Business Day” means any day other than a Saturday, Sunday, or official public holiday in
Zimbabwe and "Business Days" has a corresponding meaning;

1.2.6 “Corporate Rescue” means proceedings under the Insolvency Act [Chapter 6.07], to
facilitate the rehabilitation of a company, which is Financially Distressed;

1.2.7 “Corporate Rescue Costs or CRP Costs” means the remuneration and expenses of the
CRP (including, without limitation, all and any legal costs and expenses incurred by the CRP
in the Business Rescue) and all other claims arising out of the costs of the Corporate Rescue,
including without limitation to legal costs and other costs of the Advisors;

1.2.8 “Corporate Rescue First Report” of “CRFR” means this document together with all its
annexures, as amended from time to time, prepared and published by the CRP for
consideration and adoption by Creditors;

1.2.9 “Corporate Rescue Plan” means a document published together with all its annexures, as
amended from time to time, prepared, and published by the CRP for consideration and
adoption by Creditors in terms of Section 143 of the Act

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1.2.10 “Claims” means any claim of whatsoever nature and howsoever arising against the
Company, including a (i) Secured, (ii) Preferent or (iii) Concurrent Claim as envisaged in terms
of the Act, the origin, cause of action or agreement in respect whereof arose or was concluded
before the Substantial Implementation Date (and including each claim contemplated in this)
and without in any way derogating from the generality of the foregoing, shall include an actual,
contingent, prospective, conditional or unconditional, liquidated or unliquidated, assessed or
unassessed claim, whether due or yet to fall due for payment or performance, including any
claim the origin of which arose from statute, regulation or other legislation or arising out of any
contract and/or agreement entered into before the Commencement Date and cancelled
thereafter and, in no way derogating from the generality of the foregoing, shall include any
Claim for Tax or Taxation. These claims upon receipt shall be viewed as secured and
unsecured which has a bearing on distribution of proceeds in terms of the Act.

1.2.11 “Commencement Date” means the 31st of August 2023, being the date upon which the
Master of the High of Zimbabwe issued a certificate of appointment in accordance with
section 1223, of the Act;

1.2.12 “COBE” means the Companies and Other Business Entities Act [Chapter 24:17], (as
amended) including the regulations promulgated thereunder;

1.2.13 "Concurrent Claim" means any Claim (other than a Disputed Claim) which is unsecured and
enjoys no preference in accordance with the Act and "Concurrent Creditor" has the
corresponding meaning;

1.2.14 "Contracts" means any right, title, or interest of the Company in any contract, agreement or
understanding entered between the Company and a person before the Commencement Date;

1.2.15 “Creditors” means all persons, including legal entities and natural persons, having Claims
accepted as such by the CRP as at the Commencement Date and for the period of the
Corporate Rescue, as envisaged in the Act, but not a Creditor with a Disputed Claim or claims
that can be regarded as a post-commencement finance (“PCF”) Claim or as being costs of or
an expense of the Corporate Rescue;

1.2.16 “Creditors’ Committee” means a creditors’ committee, contemplated in terms of Section

1444 of the Act;

1.2.17 “Directors” means the directors of the Company as at the Commencement Date and the
meaning ascribed in the COBE, who are hereby, suspended of their duties and responsibilities
in terms of the COBE and such duties and responsibilities have been bestowed to the CRP
with duties and responsibilities in terms of Section 1335 of the Act;

1.2.18 “Distribution/s” means the respective payments to be made to Creditors by the CRP, to
discharge their Claims, in accordance with Section 1466 of the Act;

1.2.19 “Employees” means all persons employed by the Company as at the Commencement Date
and who remain employed at the Adoption Date;

3
Section 122. Company resolution to commence corporate rescue proceedings.
4
Section 144: Consideration of corporate rescue plan.
5
Section 133: General powers and duties of practitioners.
6
Section 146: Discharge of debts and claims.

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1.2.20 "Employees Contracts" means any right, title, or interest of the Company in any contract,
agreement or understanding entered before the Commencement Date between the Company
and any Employee for the employment of such Employee by the Company as an Employee;

1.2.21 "Encumbrance" means any claim, charge, mortgage, lien, burden, option, pledge, security,
withholding, retention of title, right of pre-emption, right of first refusal or other third-party rights
or claims, restrictions on the free transferability or security interest or an agreement,
arrangement, or obligation to create any of the foregoing;

1.2.22 "Expunged" means the full and final discharge and extinguishing of Claims, or portions of
Claims in terms of the Act, and which Claims, or portions of Claims, are consequently no
longer enforceable and recoverable;

1.2.23 “Financially Distressed” shall bear the same meaning ascribed to this term in Section 122
of the Act;

1.2.24 “Final Claims Date” means the final date for the filing of Claims, being 30 (thirty) days from
the Adoption Date;

1.2.25 “Group” means the group of companies related to the Company;

1.2.26 “Insolvency Act” or “the Act” means the Insolvency Act [Chapter 6.07] (as amended);

1.2.27 “LRA” means the Labour Relations Act, [Chapter 28:01] (As amended);

1.2.28 "Management" means the management team of the Company, including the Company's
directors, who had, and continue to have, the delegated and supervised responsibility of
managing the day-to-day operations of the Company as at the Commencement Date;

1.2.29 “Management Restructuring Plan” means the plan developed by CRP for the restructuring
of the Company;

1.2.30 “Notice of Meeting” means the notice of meeting to all Affected Persons as contemplated in
terms of the Act;

1.2.31 “Ordinary Shares” means shares with a US$1 par value issued by the Company;

1.2.32 “PCF” means post-commencement finance obtained by the Company, as authorized by the
CRP in terms of Section 1287 of the Insolvency Act, after Commencement Date;

1.2.33 "Post-commencement Claims" means any claim against the Company, the cause of action
in respect of which arose after the Commencement Date;

1.2.34 “Post-commencement Creditors” means all persons, including legal entities and natural
persons, having Post-commencement Claims;

1.2.35 “Pre-commencement Claims” means any claim against the Company, the cause of action
which arose before the Commencement Date;

7
Section 128: Post-commencement finance.

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1.2.36 “Pre-commencement Creditors” means all persons, including legal entities and natural
persons, having Pre-commencement Claims;

1.2.37 “Pre-commencement Secured Creditors” means all Pre-commencement Creditors holding

a security for their Claims;

1.2.38 "Preferent Claim" means any Claim (other than a Disputed Claim) which is preferent in
accordance with the provisions of the Insolvency Act and "Preferent Creditor" has the
corresponding meaning;

1.2.39 “Publication Date” means the date on which the Corporate Rescue Report is published to
Affected Persons in terms of section 1408 of the Act, being the 14th of September 2023;

1.2.40 “US$” or “USD” means the lawful currency of the United States of America;

1.2.41 "Receivable" means any claim of whatsoever nature which the Company has as at the
Commencement Date against any person indebted to it and includes any bank balances and
deposits, and any claim of whatsoever nature against tax authority;

1.2.42 "Shareholders" means the shareholders of the company at the Commencement Date who
for the purpose of the Corporate Rescue proceedings are represented by the Master of the
High Court of Zimbabwe;

1.2.43 “Tax/Taxation” means levies payable to government authorities in terms of the taxation acts
of Zimbabwe;

1.2.44 “ZWL” or “Zimbabwean Dollar” means the lawful currency of the definition in terms of the
Reserve Bank of Zimbabwe (RBZ) acts.

1.3 any reference in this CRFR to:

1.3.1 a paragraph is a reference to the relevant paragraph of this CRFR;

1.3.2 a Part is a reference to the relevant part of this CRFR;

1.3.3 any section is a reference to that section in the Act unless it is otherwise indicated in which
event it shall be a reference to that legislation;
1.3.4 any reference to any statute, regulation, or other legislation in this CRFR shall be a reference
to that statute, regulation, or other legislation as at the Publication Date, and as amended or
substituted from time to time;

8
Section 140: First meeting of creditors

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2 COMPANY BACKGROUND
2.1 Background to the Company
Metro Commodities was founded in 2007, during a very difficult economic period in Zimbabwe.
The company was founded with the objectives of offering affordable, top-quality bulk and
prepacked basic commodities to its valued customers locally and across the country’s borders.
In 2010 the first Metro Peech & Browne Wholesalers branch was opened in Msasa. 19 additional
stores were subsequently opened over the next 10-years in 13 major towns and cities around
Zimbabwe. Today, with wholesale branches in Msasa, Mutare, Chitungwiza, Kwekwe, Gokwe,
Kadoma, Masvingo, Zvishavane, Chipinge, Chinhoyi, Chiredzi, Bindura, Bulawayo, Gweru, and
Seke Road Metro Peech & Browne Wholesalers continues to serve its customers diligently
across the country.

Due to the financial distress the business closed the following branches: Mutare, Mrehwa,
Shurugwi, Marondera and Rusape.
2.1.1 On the 24th of August 2023, a special resolution was passed at an extraordinary board meeting
(“EBM”) to voluntarily place the company under corporate rescue which was submitted to the
company registry and the High Court in terms of section 122(1) on the assessment that:
(a) The company was financially distressed and technically insolvent; and
(b) Placing the company under Corporate Rescue would allow a reasonable prospect of
rescuing the company.

2.1.2 Dr Oliver Mtasa of Crowe Advisory (Private) Limited was appointed the CRP on the 31st of
August 2023 with the mandate to execute powers, duties, and responsibilities in terms of
Section 133 of the Act.

3 COMPANY INFORMATION
3.1 Shareholding Structure

Metro Peech is a company registered in terms of the Companies Act [Chapter 24:03] now
repealed by COBE (“the Act”) with registration number 28632/2008 situated at 142 Mutare Road,
Msasa, Harare C/O Number 7 Avon Rise, Avondale, Harare, the Corporate Rescue Practitioner’s
offices. Metro Peech is fully owned by 3 shareholders as indicated by the organogram below;
Figure 1 "Metro Peech Shareholding Structure

Midosa Investments Spear Africa Holding

Andrew Sean Baker
(Private) Limited Limited
(40.8%) (20.0%)
(39.2%)

Metro Peech & Browne

Wholesalers (Private)
Limited

Notes
1. Spear Africa Holdings is a Mauritius Company registered in terms of the Mauritian Laws
2. Midosa Investments (Private) Limited is a company registered in Zimbabwe in terms of the
Zimbabwean Laws
3. Andrew Sean Baker is a natural person and owner of Metro Peech & Browne by ownership of
ordinary shares in terms of the laws of Zimbabwe

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3.2 Directors of the Company
At the time of the Corporate Rescue the Directors of the Company were:

Director Position Designation Resident

Chairman &
Miles Andrew Peech Director Zimbabwean
Executive
Barry Micheal Anthony Browne Director Executive Zimbabwean
Carl Martin Soderberg Director Non-Executive Swedish
Byran Derek Wetton Turner Director Non-Executive South African
Andrew Sean Baker Director Non-Executive Zimbabwean

Miles Andrew Peech Corporate Secretary Zimbabwean

Notes:
(i) In terms of Section 133 of the Act the CRP shall have full control and management of the
Company, meaning the Board of Metro Peech & Browne has been suspended effective
31st August 2023.
(ii) The above mentioned are registered with the Registrar of Companies as per the CR6 and
all the above-named are still legal persons. Messrs Christopher Percy Mallett Peech and
Peter Mapuma Vukani Mubi resigned in April 2023 as per the CR6 provided and lodged
with the Company Registrar.
(iii) Mrs Tracy Du Plooy (Finance Executive) and Mrs Rufaro Kadyevu (Finance Manager)
attend Board meetings on invitation.
3.3 Statement of Affairs
As per the information presented and availed by the Directors and management of the Company
to the Corporate Rescue Practitioner (“CRP”), the following statement of affairs presents the
financial position of the company as at 31st July 2023.
As at 31/7/2023
Statement of Affairs US$
Assets
Non-Current Assets 5,871,311
Current Assets 6,954,894
Stock & Other Current Assets 6,980,022
Cash 479,190
Total Assets 12,826,205
Liabilities
Non-Current Liabilities (1,773,640)
Secured creditors -
Unsecured creditors (1,773,640)
Current Liabilities (19,931,058)
Secured creditors* (5,390,333)
Unsecured creditors (14,540,725)
Total Liabilities 21,704,698
Net Liabilities (8,878,493)
*Secured liabilities are mostly bank loans
Notes:
The company is technically insolvent as it has a negative net asset value of (US$8,878,493) as per the
Statement of Affairs above. Other indicators of insolvency include, but are not limited to:
(i) Inability to pay staff salaries on time. At the time of placement of the company under corporate
rescue, the company was paying 50% below NEC rates.
(ii) Inadequate stocking level for the market leading to stock outs and loss of customers
(iii) Conversion of bank loans from ZWL to US$ which led to ballooning of the debt and interest
payment. The company negotiated for the Reduction of interest payments to financial institutions.
(iv) Inability to settle rentals as they fall due. The company negotiated for rent holidays.
(v) Continued disparity on the black-market vs interbank rate exchange rates to the ZWL/US$ have
affected stock valuations.

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3.4 Additional Information

Financial Year End: 31 December

Registered Business Address and Head 142 Mutare Road, Msasa, Harare
Office:
Auditors: Ernst & Young
Physical Address: 2nd Floor, Angwa City Mall,
Harare, Nkwame Nkururma / Julius Nyerere
Way, Harare
Email: [email protected]
Bank 1: CABS
Branch: Northridge Park
Physical Address: 3 Northend Close,
Borrowdale
Harare
Email: [email protected]
Bank 2: NMB Bank Limited
1st Floor, Unity Court
Kwame Nkrumah Avenue
Harare
Email: [email protected]
Bank 3: NBS Bank Limited
14th Floor Social Security Center, Cnr Sam
Nujoma Street/ Julius Nyerere Way,
Harare,
Email: [email protected]
Lawyers Mawere & Sibanda Commercial Lawyers
Physical Address: 10th Floor Chiedza House
Corner First Street/Kwame Nkrumah Avenue
Harare
Email: [email protected]

3.5 Creditors of the company as at the commencement date

As at the 31st of August 2023 in terms of the records of the Company the Creditors amounted
to the following:

Creditors Amount (US$)

Employees 229,399
Trade Creditors 9,835,088
Statutory Creditors 1,173,934
Intercompany & other liabilities* 5,075,944
Bank Loans 5,390,333
TOTAL 21,704,698
* Intercompany with Greenwave Milling (Private) Limited and Greenwave Trading (Private) Limited

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4 BRANCHES NETWORK

Branch Address
Bindura Branch Manager: Wisdom Chitakatira
19 & 20 First Street/Appleby
Bindura

Tel: +263 (66) 210 7465 ,7479,7487,7492

Mobile: +263 772 568 855
Email: [email protected]
Bulawayo Branch Manager: Erben Ncube/Samuel Moyo
Stand 13748, 6th Avenue Extension/Basch Street
Bulawayo
Tel: +263 (292) 261693-8
Mobile: +263 776 414 651
Email: [email protected]
Chinhoyi Branch Manager: Kelly Zanyunyu
38B Magamba Way
Chinhoyi

Tel: +263 (67) 21 21035-40

Mobile: +263 715 227 978
Email: [email protected]
Chipinge Branch Manager: Prince Gumbanjera
327 Ferreira Road
Chipinge

Tel: +263 (227) 204 3319/2319

Mobile: +263 774 864 917
Email: [email protected]

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Branch Address
Chitungwiza Branch Manager: Dunmore Chimboza
Stand 20468 Maeresera Road
Chitungwiza

Tel: +263 (024) 21 21659/22088-9

Mobile: +263 774 684 686
Email: [email protected]

Gokwe Branch Manager: Chenge Pezani

16-17 Mateta Road
Gokwe
Tel: +263 (59) 2450, 2272
Mobile: +263 772 282 200
Email: [email protected]
Gweru Branch Manager: Linos Mukungunurwa
1 Harare Road
Gweru
Tel: +263 (54) 2 224301-3
Mobile: +263 713 034 875
Email: [email protected]
Kadoma Branch Manager: Richard Kazingizi
34A Godwin Road
Kadoma
Tel: +263 (268) 21 28447/8
Mobile: +263 774 352 141
Email:[email protected]
Chiredzi Branch Manager: Andrew Mandaza
592 Baobab Road,
Chiredzi
Tel: +263 231 2732, 2654
Mobile: +263 231 2732, 2654
Mobile: +263 774 162 296
Email: [email protected]

Kwekwe Branch Manager: Martin Chipunza

8 Cobar Street
Kwekwe
Tel: +263 (55) 25 25248-52
Mobile: +263 782 243 909
Email:[email protected]
Masvingo Branch Manager: Pascal Muchore
7448 Welby Road
Masvingo
Tel: +263 39 266714
Mobile: +263 772 628 162
Email: [email protected]
Msasa Branch Manager: Norman Matwaya
142 Mutare Road
Harare
Tel: +263 242 447421
Mobile: +263 772 666 291
Email: [email protected]

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 Branch Address
Mutare 2 Branch Manager: Ashleigh de Klerk
10 Second Street
Mutare
Tel: +263 20 60583/4
Mobile: +263 773 782 900
Email: [email protected]
Seke Road Branch Manager: Agnes Pazira
40600 Sunningdale
Corner Seke Road/Boshoff Drive
Tel: +263 (242) 589462-3/5/70/76
Mobile: +263 783 513 577
Email: [email protected]
Zvishavane Branch Manager: Nomore Chigwenhese
701 Light Industrial Area
Zvishavane

Tel: +263 (39235) 3290, 2809

Mobile: +263 772 647 263
Email: [email protected]

5 PROSPECTS FOR THE RESCUE OF THE COMPANY

5.1 Creditors and Suppliers
Proposal Brief Description
Continued Stock Support and Product Suppliers are willing and expressed their
Supply: commitment to continue providing stock to Metro
Peech & Browne's branches and store fronts for
the business to continue operating in terms of its
objective subject to security of payment.

Payment Guarantee: Suppliers required assurance that the new stock

post CR will be paid 100% by the Corporate
Rescue Practitioner (CRP) as it is sold until the
company exits the corporate rescue process.

Support in Corporate Rescue Plan: Suppliers and Banks are open to supporting the
Corporate Rescue Plan where prospects for
recovery are positive.

Board Approval: Some suppliers indicate that their support is

contingent upon approval by their respective
boards.

Company's Continuation: Suppliers and creditors emphasized on the

assurance that the company will not be
liquidated and will continue to exist in the
foreseeable future.

Notes: The support is not conclusive however in conclusion suppliers and creditors are willing
and keen to assist in the resuscitation program of the company.

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5.2 Potential investors

We have been engaged by several potential investors, who have expressed interest on the
Asset (Metro Peech & Browne). As at the publication of this report 10 prospective investors
have formally and informally expressed their interest. This is an indication of the value given
to both the brand and its network. Most of the branches of the company are located on good
strategic sites. This includes those locations which are under construction. All the small poorly
located and invisible branches have been closed.

5.3 The shareholders of the Company are committed to be involved and to contribute to the
restructuring of the business.

5.4 The business model has been reviewed and continues to be refined and this has resulted in
overhead structures being reduced significantly. This brings down the breakeven point.
Governance structures are being redefined and the corporate rescue plan will also focus on
improving the model.

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6 STEPS TAKEN SINCE THE APPOINTMENT OF THE CRP

6.1 ADMINISTRATIVE MATTERS

6.1.1 Background to the Company's Financial Distress

The main reasons for the Company becoming Financially Distressed can be summarised as
follows:
(i) The company is technically insolvent as it has a negative net asset value of
(US$8,878,493) as per the Statement of Affairs above. Other indicators of insolvency
include, but are not limited to:
• Inability to pay for loans and interest. The company has high gearing ratios.
• Inability to pay staff salaries on time. At the time of placement of the company
under corporate rescue, the company was paying 50% below NEC rates.
(ii) The company has an inadequate branch inventory leading to stock outs and sizeable
unutilized shop space. Because Metro Peech & Browne is generally a low margin high
volume business, stock out play a significant role in the business resulting in negative
cashflows.
(iii) Rapid expansion without adequate capital.
(iv) Poor servicing of liabilities resulting in suppliers holding back supplies. The delayed
payments and unsettled accounts have led to suppliers withholding their supplies and
transitioning to consignment stock arrangements.
(v) Conversion of bank loans from ZWL to US$ which led to ballooning of the debt and
interest payment. The company negotiated for the Reduction of interest payments
with financial institutions.
(vi) Competition from the informal sector which is not subject to similar regulatory
compliance. The informal sector traders generally do not comply with the payment of
tax in comparison with established businesses such as Metro Peech & Browne.
(vii) Governance gaps especially on financial discipline and regular board meetings. In
terms of good corporate governance (in line with COBE, King III Report and the
Zimbabwe National Code of Corporate Governance) a minimum of 4 board meeting
should be held annually and in addition, having more Independent Non-Executive
board members would add more oversight. In the case in Metro Peech & Browne, in
terms of their shareholders agreement, 2 board meetings per year were to be held.

6.1.2 Appointment of CRP

Upon appointment, the CRP executed his duties in terms of Section 134 of the Act and
commenced an investigation of the company's affairs, business, property, and financial
situation. The CRP has focused on:

6.1.2.1 Rationalization of the topline and cost structure

▪ Engaged top suppliers of the Company to consider increasing stock levels which
will resultantly increase revenue.
▪ Currently assessing and revisiting the business model of Metro Peech & Browne
to ensure viability.
▪ Significant reduction on the cost structures, including payroll and other
operational expenses, through measures such as 50% salary cuts, lowering
administration overhead with an objective to lower the breakeven sales
threshold.
▪ As part of the corporate rescue process, all interest payments on borrowings
have been suspended in line with the rules of corporate rescue.

6.1.2.2 Corporate Governance

• Board and management suspended.
• CRP took over full control of management of the business.
• Working on improving governance process.

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 6.1.2.3 Material Assets
• Most of the Material assets are stocks, shelves, office fixtures and fittings, motor
vehicles and land and buildings.
• We noted that there were some assets which had been sent to ABC Auctions for
sale. This was meant to free up cashflow for operations. The referred assets are
mainly shelving and office equipment of closed branches.
• The CRP has taken full control of all assets of the company.

6.1.2.4 Legal Structure

• The legal structure is as provided in Section 3 above.

6.1.3 Management Control

Following the dissolution of the Board of directors in terms of section 130(2)9, the CRP took
full management control of the company in substitution for its board and pre-existing
management.

6.1.4 Notification to Company Registrar and Affected Persons

The CRP notified the Company Registrar and Affected Persons that the Company has been
placed under Corporate Rescue. The notification included the appointment of the Corporate
Rescue Practitioner, board resolution, and the advert.

6.1.5 Ratification of agreements

Agreement Parties Ratified/Terminated
Lease agreements Engagements with Landlords starting Under review
soon to review the agreements in
place.
Supplier Agreements Most agreements with suppliers are Under review
consignment agreements.
Employment contracts Metro Peech & Staff: Under review
The CRP shall reconsider employee
contracts in terms of Section 129 (1)
(a)(i)10

6.1.6 Cash Resources and banking

6.1.6.1 As at Commencement of corporate rescue, the Company had ZWL1,024,613,601
and US$105,601 available in its bank account. Most of the funds were domiciled at
CABS and NBS. Further the Company had US$193,833 as cash. The funds were
used to cover critical operating expenses.

6.1.6.2 The CRP is in the process of converting the Nedbank accounts into Trust Accounts.

6.1.6.3 The Company generates revenue through its normal trading activities which include
wholesale and distribution.

6.1.6.4 The CRP has communicated with all banks on the new banking relationship for the
period of the corporate rescue.
6.1.6.5 To preserve and manage the already laced cash resources of the Company, the
CRP have implemented a process whereby all purchase orders and other expenses
are vetted before they are approved by the CRP.

9
Section 130: Effect on shareholders and directors.
10
Section 129: Effect of corporate rescue on employees and contracts.

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6.1.7 Employees’ Meeting:

6.1.7.1 The Corporate Rescue process was explained, and possible outcomes were
presented, to the Employees;
6.1.7.2 assistance was also given to Employees by providing answers to various questions
and concerns arising from the Corporate Rescue process;

6.1.7.3 Employees expressed their support for Business Rescue and implored the CRP to
rescue the Company.

6.1.7.4 The company faces skills flight following salary cuts of 50%. The company has a
total headcount of 497 staff comprising 392 NEC staff and 105 Managerial staff.
NEC was engaged for this variation of salary cuts as at 1 August 2023.

7 SUMMARY OF THE CORPORATE RESCUE PROCESS

7.1 Introduction to Corporate Rescue and Timelines

7.1.1 Corporate Rescue, as defined in section 122(1)(b) of the Act, refers to proceedings to
facilitate the rehabilitation of a company that is Financially Distressed by providing for the
temporary supervision of a company by one or more business rescue practitioners, and of the
management of its affairs, business, and property by the appointed Corporate Rescue
practitioner;

7.2 Section 126 of the Act provides for a general moratorium on legal proceedings against the
company. During corporate rescue proceedings, no legal proceeding, including enforcement
action, against the company or in relation to any property belonging to the company, or
lawfully in its possession, may be commenced or proceeded within any forum

7.2.1 The objective of Corporate Rescue in a general sense is the development and
implementation, if approved, of a Corporate Rescue Plan which:

7.2.1.1 rescues a company by restructuring its affairs, business, property, debt and other
liabilities, and equity in a manner that maximizes the likelihood of the company
continuing in existence on a solvent basis; or
7.2.1.2 results in a better return for the company’s creditors and/or shareholders than would
result from the immediate liquidation of the company.

7.2.1.3 The following summary sets out the salient dates on which certain events have taken
and will take place during Corporate Rescue proceedings –

Event Start Date End Date Status

Application for Corporate
24 August 2023 25 August 2023 Done
Rescue
CRP appointed 28 August 2023 31 August 2023 Done
Notices to all affected parties 1 September 2023 5 September 2023 Done
Investigation of company
affairs and development of 1 September 2023 26 October 2023 Ongoing
Corporate Rescue Plan
First Creditors' meeting 20 September 2023 20 September 2023 Outstanding
Publication and review of
26 October 2023 26 October 2023 Outstanding
Corporate Rescue Plan
Publication of Notice of
Meeting to consider the 26 October 2023 26 October 2023 Outstanding
Corporate Rescue Plan

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 Event Start Date End Date Status
Meeting to determine future of
1 November 2023 1 November 2023 Outstanding
the company
Adoption and Implementation To be advised in
1 November 2023 Outstanding
of CR Plan the Plan

8 THE PRACTITIONERS’ REMUNERATION

The CRP has submitted his proposed remuneration to the shareholders in terms of Section
136 read together with the Second Schedule item 1 of the Act.

9 CONSIDERED VIEW OF THE CRP IS THAT:

(i) The company has reasonable prospects of being rescued as opposed to liquidation.
(ii) An investigation continues in terms of Section 134 of the Act and on completion of
the investigation, the CRP shall craft and then present the Corporate Rescue Plan for
approval in terms of Section 144 of the Act; and
(iii) The Master appoints a creditors committee in terms of Section 140 (b) to allow the
CRP to consult a creditor representative body during the development of the
corporate rescue plan.

10 DECLARATION OF THE CRP

The appointed Corporate Rescue Practitioner of Metro Peech & Browne, Dr. Oliver Mtasa, of
Crowe Advisory (Private) Limited do hereby confirm that the actual information presented in
this report, is in good faith.

…………………………………………………………………..
OLIVER MTASA
CORPORATE RESCUE PRACTIONER
METRO PEECH & BROWNE WHOLSESALERS (PRIVATE) LIMITED (UNDER CORPORATE
RESCUE)

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ANNEXURE A: CRP CERTIFICATE OF APPOINTMENT

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ANNEXURE B:

Your ref:

Our ref: OM/RBS/03/2022

20 September 2023

THE MASTER OF HIGH COURT

Master of High Court House
Herbert Chitepo Ave
Harare
Dear Sir
METRO PEECH & BROWNE WHOLESALERS (PRIVATE) LIMITED (UNDER CORPORATE
RESCUE) – CR9/2023
Approval of Corporate Rescue Practitioner’s fees

We the Shareholders and creditors of Metro Peech & Browne Wholesalers (Private) Limited (Under
Corporate Rescue) (“Metro Peech & Browne” or “the Company”) have agreed with Dr Oliver Mtasa
to appointed Corporate Rescue Practitioner (“CRP”), that he will be remunerated as set below:
(i) In terms of Statutory Instrument 126 of 2023, the Corporate Rescue Fees are 3% of Metro
Peech & Browne revenue.

(ii) Payment of actual invoices raised by professionals engaged to conduct the Corporate Rescue
proceedings

In addition, the CRP is also seeking approval of reimbursement of all costs disbursed and expenses
incurred during this process.
Yours faithfully,

……………………………………..
Dr Oliver Mtasa
Corporate Rescue Practitioner

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