Delta dairies goes under the hammer again

Dr Howard Sigwele
Dr Howard Sigwele

Struggling milk company, Delta Dairies was on Friday placed under provisional liquidation following a High Court petition by nine of its creditors.

According to the petition, Delta Dairies owed Tswana Fuel and eight other companies close to P10 million in respect of services provided to the company, which is the first citizen owned dairy plant, founded by Dr Howard Sigwele.

The amount is said to be in the form of P187,200 being fuel supplied by Tswana Fuel, P77,750 for professional services provided by BDO Services, P600,437.07 for cleaning chemicals and equipment supplied by VodaClean, P843,300.84 as salary arrears owed to Herman de Lange and Scharl Varnfield representing the over 54 workers that are  owed salaries.

The other P175,479.38 is for goods sold and delivered by General Packaging Industries, P2,158,274.60 for UTI Botswana which provided freight forwarding services, P1,144,747,90 for money lent and advanced by Global Holdings Botswana, and P4,624,560.18  (R5,610,191.51) goods sold and delivered with services rendered by Tetra Pak South Africa.

Delta Dairies is said to have failed to pay the amounts they owed the creditors despite several demands and attempts made by the creditors, including attempts to attach some of the citizen-owned milk processing plant’s assets.

In August last year, the Registrar of the Industrial Court issued a Writ of Execution against the milk company after it failed to pay its employees the outstanding salaries.

Mboki Chilisa, attorney representing the creditors, also revealed in a court document dated January 22, 2015 that the company was issued with letters demanding the outstanding payments within three weeks failing which Delta Dairies will be deemed unable to pay its debts.

“No payment has been received from the respondent in response to the demands nor has respondent secured or compounded its indebtedness to the reasonable satisfaction of any of your petitioners and the respondent is deemed conclusively unable to pay its debts within the contemplation of section 368 (a) as read with section 369 (b) of the Companies Act,” reads part of the court papers. In these circumstances, the attorney submitted that it is in the best interest of all creditors for the company to be wound up, adding that the company is deemed unable to pay its debts by virtue of failure to pay upon demand.

He said in any event that respondent is unable to pay its debts on any tests then its winding up is just and equitable. Therefore, Chilisa sought for the application to be granted and that a provisional liquidator be appointed. John Little of Corporate Services was appointed as provisional liquidator under the authority of the Master of the Court pending granting of a full order.

However, Nancy Kiggundu, attorney representing Delta Dairies said the provisional order is just an interim order issued while the parties negotiate about the matter. She indicated that the order might be confirmed or discharged depending on the outcome of the negotiations. 

The liquidation of Delta Dairies will mean the company will be wound down and put under action for any interested buyers to bid for it. There have been reports that some three milk giants, including two South African companies, had registered their interest to buy the plant.

Editor's Comment
What about employees in private sector?

How can this be achieved when there already is little care about the working conditions of those within the private sector employ?For a long time, private sector employees have been neglected by their employers, not because they cannot do better to care for them, but because they take advantage of government's laxity when it comes to protecting and advocating for public sector employees, giving the cue to employers within the private sector...

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