Steelnet placed under final liquidation

Published: 10 June 2013

STEELNET Zimbabwe has been placed under final liquidation and the liquidator has invited tenders from interested parties to purchase operating assets.

Steelnet liquidator Mr Christopher Maswi of Fairvalue Management Consultancy announces that the company was placed under final liquidation in terms of the High Court Order HC746/13 granted in Harare on May 8 and invites tenders from interested parties to purchase the operating assets of the 3 divisions Tube and Pipe Industries, BMA Fasteners and Hastt Zimbabwe which are being sold separately.

The assets include plant and equipment and land and buildings. Each division assets are sold as a whole unit.

Steelnet was suspended from trading on the Zimbabwe Stock Exchange after the High Court granted on order for provisional judicial management.

The company share was last offered at US0,17c.

Steelnet, whose total liabilities stood at US$4,6 million by the end of May in 2010, opted for a voluntary judicial management to allow injection of fresh capital by shareholders through a $3,4 million rights offer.

Its main shareholders control over 86 percent and these include FBC Pension Fund which owns 29 percent, Equivest Nominees with 11%, SMM Holdings with 8%, Local Authorities Pension Fund and NSSA with 6,4% and 5,5% respectively.

"It is just equitable that the company be placed under the provisional judicial management to allow working capital to be injected . . . to revive the fortunes of the company as opposed to letting individual creditors to sell in execution items or properties so far attached at the expense of other creditors," read part of an High Court affidavit.

Steelnet, which operated three business units, saw its working capital eroded during the hyperinflation period between 2007 and 2008.

The liquidity crunch arising from the introduction of the multi-currency system also created a further burden on the viability of the company.

Efforts to raise working capital were unsuccessful due to high interest rates and the company has been failing to operate profitably.

In 2010, shareholders attempted but failed to raise about $6 million because the main shareholder could not follow its rights.

Steelnet operates Tube & Pipe, which produces seam-welded steel pipes, BMA Fasteners, which makes mild steel industrial fasteners and mining bolts.

It also owns Hastt, which makes tractor and animal-drawn agriculture implements.
- Byo24News