Hwange Colliery scheme of arrangement on course

Hwange Colliery scheme of arrangement on course
Published: 12 May 2018
Hwange Colliery Company Limited (HCCL) says it has been paying monthly instalments to its employee creditors since December, 2017, and it will continue until the $70 million arrears are paid in full.

This is in accordance with the provisions of a scheme of arrangement agreed upon last year.

HCCL board chairperson Andrew Lawson who is also the chair of the scheme of arrangement said employee creditors have been paid their due instalments since December, 2017. He added that trade creditors will be paid starting in June 2019.

"Employee creditors have been paid their monthly instalments since December 2017. These instalments will continue until all employees, current and former, are fully paid their arrears in the scheme of arrangement," Lawson said in a statement.

"Instalments to trade creditors will commence in June 2019. To date, 519 employees' scheme balances have been cleared," he added.

HCCL entered into a creditors' scheme of arrangement in May 2017, which saved the coal miner that had been reeling from litigation over debts, from judicial management.

"The scheme of arrangements and turnaround plan is anchored on increased production and sales. Coal production for first quarter 2018 was 232 000 tonnes compared to 105 000 tonnes in the same period in 2017," Lawson said.

For the second quarter of 2018, the company plans opencast mining production to reach 300 000 tonnes per month by June 2018 and to take delivery of the remaining underground mining equipment so that full capacity production is reached in July 2018.

In 2015, government granted the company three concessions in Western Area, Lubimbi East and West. The new concessions, which are expected to prolong the lifespan of HCCL by 50 to 70 years, have an estimated resources of about 750 million tonnes of mainly coking coal and thermal coal.

The coal company reportedly signed two 25-year coal supply agreements with the Zimbabwe Power Company and Lusulu Power. The agreements are part of the initiatives to support and sustain the company's turnaround strategy.

- The Financial Gazette
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