Abattoir fights liquidation

Abattoir fights liquidation

Rapelang Mosae

MASERU – MERAKA Lesotho Abattoir and Feedlot, a Lesotho and China intergovernmental abattoir,  is fighting liquidation in the Commercial Court after it failed to pay its livestock supplier M2.3 million.

The livestock supplier, Eldaro Trading, says in its court papers that Meraka’s share capital has not helped boost the company’s operations.

Eldaro Trading says the share capital has been exhausted hence it is not available to conduct the business of which the shareholders have invested in.

Meraka in its affidavit has admitted to be indebted to Eldaro Trading in the amount of M2.3 million.

Eldaro states that the amount has long been overdue with Meraka failing to settle the debt. It says this proves that Meraka is not able to pay its debts.

Meraka on the other hand states admits that while Eldaro Trading was its supplier of livestock, there was an agreement that it would be given 30 days to settle its invoices to Eldaro Trading.

Eldaro Trading has however disputed this, stating that it had to source livestock for Meraka, so it was an agent rather than a supplier.

Eldaro further states that it had entered into a joint venture agreement with Meraka with the plan to export beef to China.

Eldaro says the joint venture began operating in May 2014. It says even when the agreement was to get payments after 30 days, they last received payments from Meraka on February 10 last year.

Eldaro argues this proves that Meraka is unable to settle its debts and therefore it is not liquid enough to carry on its intended business at a profit and should therefore be liquidated.

The affidavit also states that Meraka had failed to prove its solvency and its ability to pay its creditors.

It wants Meraka to that it has cash resources or that it has access to cash because its account is overdrawn. It says Meraka should provide proof of its recent account statement if it does in fact have a liquid account.

Eldaro states that Meraka demanded credit in an escalating fashion hence its current financial position.

Meraka is a Lesotho and China intergovernmental project that was created after the Lesotho government adopted a policy of industrial development in Lesotho to create jobs and opportunities for Basotho.

The Chinese government on its part was to reap the benefit of having beef sent to China, because there is a shortage of beef in that country.

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