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Garment firm in abysm of debt
25
Feb '08
Phenix Logistics, the only company in Uganda that specializes in the manufacture of high quality textile garments from knitted fabric made with locally produced organic cotton is constantly fighting the clouds of deprivation.

To add to the misery, MPs have rejected its proposal of giving to the Government, 47 percent shareholding of the company instead of clearing the loan of SH4.2 billion loan.

Managing director of the company, pleaded before the parliament for additional loans on grounds that Phenix was in dire need to re-capitalize, buy inputs, stock-up cotton and make payments to its employees.

In the year 2000, Phenix bought the former Uganda Garment Industry Limited (UGIL) for US $500,000. However, even then the machinery was rusty and too old to operate. When asked for assistance, the Government sanctioned two loans through the Uganda Development Bank amounting to SH1.72 billion SH4.2 billion, respectively.

However, under the present circumstances, the Government has refused to entertain any further pleas from Phenix because the proposed deal would not be beneficial and expert reports show that the company would continue to incur losses of SH10 billion till 2010.


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