The Oromia Public Enterprise is edging closer to bagging Ayka Addis Textile Factory for 1.82 billion Br. The factory, 20Km west of Addis Abeba, in Alemgena, Oromia Regional State, has been idle under the management of the Development Bank of Ethiopia (DBE) from late 2018 following the default of two billion Birr loans taken before it started operations.

Sources from the policy bank confirmed the public enterprise won the foreclosure a month ago.

According to Adare Assefa (PhD), the head of the Oromia Public Enterprise, no bidders showed interest until the enterprise decided to buy the textile factory last month. He believes it will create more job opportunities in the area and awaken daunted businesses that previously served the factory employees.

"We've made the first 20pc of the payment," he said.

The Enterprise administers 56 companies under its fleet with the factory expected to be operational in the coming six months and planning to source raw materials by entering into a vertical integration deal with farmers. According to Adare, enterprise management plan to transfer full ownership to private investors in the long run. He disclosed three individuals and two companies administered by the Enterprise have 25pc shares but withheld their identity.

Leben Girma has worked at the Eltiex Textile Factory for over two decades.

"It's been long overdue," he said. According to him, the success of factories can be guaranteed when diverse stakeholders are involved. In this particular case, Leben believes the well-equipped textile factory with a spinning machine can partner with small garment enterprises.

The policy bank, headed by Yohannes Ayalew (PhD), has been paying salaries for over 4,300 Ayka Addis employees. According to Adare, the Enterprise will take over and hire additional 5,700 employees.

Ayka Addis was established in 2006 by three Turkish shareholders with 679 million Br paid-up capital out of the authorised capital of one billion Birr. Ayka Addis borrowed 813 million Br from the DBE and became operational in 2010, shipping products to Germany, Spain, the US, Japan, France and Canada for eight years. This could have allowed earning 400 million dollars from exports with annual average revenue constituting 28.4pc. However, the factory can not return its loan on time.

The Commercial Bank of Ethiopia is in a similar situation floating a bid for Saygin Dima and Selendawa Textile, after failing to return their loans with no interest.