by Pretty Chavango
The Cotton Company of Zimbabwe (Cottco) has been placed under voluntary corporate rescue, a move supported by the Mutapa Investment Fund, its active shareholder, in an effort to shield the struggling firm from creditors and prevent the seizure of assets.
The development comes just days before the 2026 cotton marketing season, scheduled to begin on 11 May, raising fresh concerns over the company’s ability to finance operations and pay farmers. Cottco told Parliament that while it has engaged bankers and financiers, funding has not yet been unlocked.
“We have made arrangements with our bankers… but we haven’t gotten to a stage where we can say we are now drawing down on those facilities,” officials said, adding that essential operational costs such as fuel, packaging, and logistics remain unfunded.
The company said the decision to enter corporate rescue was driven by mounting pressure from creditors, some of whom had already begun legal action.
“It was either we pay or we put the business under corporate rescue… any delay would have meant that assets could have been attached and sold,” officials told lawmakers. Corporate rescue practitioners have since been appointed to oversee the restructuring process.
Cottco’s financial distress dates back to around 2015, when low global cotton prices and widespread side marketing destabilised the sector. Since then, the company has relied heavily on government support, including input schemes and loan guarantees, to sustain operations. However, the withdrawal of those guarantees in recent years left Cottco unable to access commercial financing. The situation was further worsened by the 2024 El Niño-induced drought, which sharply reduced cotton output.
Thousands of farmers remain affected, with many still owed payments from previous seasons. Lawmakers noted that despite government support estimated at about US$60 million annually, the company still carries arrears of around US$25 million. The delays in payments have fuelled side marketing, as farmers turn to alternative buyers offering quicker cash.
With the marketing season imminent, uncertainty remains over whether Cottco will secure the funding required in time. Officials said engagements with financiers are ongoing and expressed hope that agreements would soon be concluded, but acknowledged that delays could disrupt the season and further erode farmer confidence.
Members of Parliament raised concern over the implications of corporate rescue for farmers, warning that any disruption during the peak marketing period could deepen mistrust and push more growers away from the formal system. Cottco, however, insisted that securing funding to pay farmers remains a priority, with discussions underway with banks and pre-financing partners.
The Mutapa Investment Fund said the intervention is aimed at stabilising Cottco, protecting the cotton value chain from collapse, and creating space for structured debt resolution as rescue practitioners engage creditors and financiers to restore the company’s viability.
“The decision to place Cottco under corporate rescue is not about abandoning the company, but about protecting it from immediate collapse. It gives us a structured legal framework to stabilise operations, engage creditors, and secure a sustainable funding solution that safeguards the interests of farmers and the wider cotton value chain,” said Dr Mangudya chair of the Mutapa Investment fund.
