Zimasco set to come out of judicial management

Published: 01 December 2017

ZIMBABWE's largest ferrochrome producer, Zimasco, is expected to come out of judicial management early next year after a successful turnaround plan that will enable the company to pay its creditors within five years.

Last year, the Midlands-based mining and smelting concern made a voluntary application to the High Court to be placed under judicial management after failing to service debts that had ballooned to over $65 million in 2015 from about $38 million in 2009.

Speaking by telephone yesterday, Zimasco judicial manager Mr Reggie Saruchera said the firm was presently indebted to different creditors including banks and retrenched workers to the tune of about $130 million.

"We have come up with a turnaround plan that will see us paying our creditors on a time frame ranging between four and five years. So far, we have paid our creditors $33 million out of what we owe," he said.

"Based on the turnaround plan that we have come up with, we expect Zimasco to come out of judicial management between January and February next year," he said.

As spelt out in the scheme of arrangement with shareholders and creditors that the retrenched workers be paid first, Mr Saruchera said the redundant employees have so far been paid over 80 percent of their dues.

Zimasco was placed under judicial management to safeguard the interest of the ferrochrome value chain sector that include stakeholders such as investors, creditors, workers, management, and Government.

Mr Saruchera said Zimasco was being moved out of judicial management following indications that the ferrochrome producer could operate optimally and in a cost-effective and sustainable basis.

"The company has posted a turnover of $160 million over 16 months with profits exceeding $45 million.

"We want to focus on producing so that we grow the economy and more people can get employed as enunciated by the President (Emmerson Mnangagwa) during his inauguration speech," he said.

It is also believed that the operational capacity of Zimasco is set to receive a major boost following a freight deal to transport one million tonnes of ferrochrome from the Midlands signed between Zimasco, the National Railways of Zimbabwe and CFM of Mozambique on October 25.

When operating at full throttle, Zimasco has an average annual turnover of about $200 million with a potential to employ over 2 000 people directly and more than 4 000 indirectly in its outsourced functions. At present, the mining and smelting concern employs about 700 workers directly.
- zimpapers

Tags: Zimasco,