The assets of former cotton giant Plexus Cotton Ltd. will be sold through private negotiation after failing to attract any bids at a public auction. This development is part of the ongoing insolvency proceedings for the company, which ceased operations in 2022.
The Cabo Delgado Judicial Court had put ten buildings and factories up for a public auction, hoping to raise €6.6 million. However, according to the insolvency administrator, Auxílio Nhabanga, the auction was declared void due to a complete lack of interest from potential buyers.
“We had no bids and the auction was declared void,” Nhabanga told reporters. “It was decided to negotiate privately to see if a slightly higher figure can be obtained than half of what would have been obtained at the second auction.”
The British-owned company, once a major player in Mozambique’s cotton industry, cited a combination of factors for its financial decline, including damage from cyclones and the impact of armed violence in the Cabo Delgado region. Its 2022 closure left thousands of cotton farmers without a buyer for their crops and created debts of approximately 515 million meticais (€6.9 million).
The decision to move to private negotiation with sealed bids was made after a meeting between the insolvency administrator, the creditors’ committee, and the judge overseeing the case. According to Benedito Cossa, a representative for the creditors, a key priority is the payment of unpaid wages to the company’s estimated 200 workers.
The sale of the assets will be a crucial step toward settling the company’s debts, which are primarily owed to four banks: Moza Banco, BCI, Access Bank, and Société Générale. The unpaid wages and debts to tax authorities and social security are also part of the financial liabilities.
In a separate but related development, Portugal’s Felpinter announced an agreement in May 2023 to take over Plexus Cotton Ltd.’s business operations, which included two processing units.
The challenges at Plexus coincide with a broader downturn in Mozambique’s cotton sector. Official data shows that cotton exports, a key cash crop for the country, fell by more than half in 2024 to just US$14.2 million (€12 million), the lowest figure in at least five years.
