Steelnet calls for meeting with creditors

Published: 04 July 2013

Steelnet (Private) Limited members and creditors will hold their first meeting at the High Court of Zimbabwe on Wednesday next week.

According to a statement by the company, which is now under liquidation, the meeting will take place at 8.30am and all creditors are expected to provide proof of their claims.

The company also advised all creditors who had not lodged their claims to urgently collect proof of claim forms from its offices and to submit them by tomorrow afternoon to the Master of High Court.

The group owes over US$8 million to its creditors while its assets have been valued at about US$10,9 million. Major creditors of the company include CBZ Bank Limited, which is owed about US$1,4 million, while unpaid workers' salaries and wages since 2009 amount to US$2,4 million.

Steelnet's problems started with a liquidity crisis during the hyperinflationary era around 2008 after its working capital was eroded.

This resulted in the company losing its capacity to operate and produce products for the market.

Steelnet Zimbabwe was suspended from trading on the Zimbabwe Stock Exchange towards the end of 2011 after the High Court granted an order for provisional judicial management.

Earlier in May the same year the group had opted for voluntary judicial management to allow injection of fresh capital by shareholders through a US$3,4 million rights offer as its liabilities stood at US$4 million then.

In its audited financial results for the full year to December 2010, Steelnet suffered a US$7,2 million loss before tax and loss attributed to shareholders of US$5,2 million.

The previous year a local bank obtained a warrant of execution against movable property of the company for the recovery of an outstanding loan.

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

Steelnet owns Tube & Pipe in Harare, who manufacture seam welded metal pipes, tubes and sheets, BMA Fasteners in Bulawayo who produce bolts, nuts and underground rock support and Hastt Zimbabwe in Norton who manufacture tractor- and animal-drawn agricultural implements.
- herald