Zimasco strikes deal with creditors

Zimasco strikes deal with creditors
Published: 11 December 2017
KWEKWE based chrome smelting company, Zimbabwe Mining and Smelting Company (Zimasco), has agreed on a scheme of arrangement with its creditors and is set to be removed from judicial management next month. This comes after Zimasco made a turnover of more than $ 158 million within the past 16 months.

A scheme of arrangement is a court-approved agreement between a company and its shareholders or creditors. It may affect mergers and amalgamations and may alter shareholder or creditor rights. In an interview, Zimasco Judicial Manager, Mr Reggie Saruchera of Grant Thornton International, said once the largest ferrochrome producer in the country and a force to reckon with in Africa would be weaned next month after being incubated for close to two years under judicial management.

Zimasco last week invited creditors to deliberate on the scheme of arrangement, which was then passed unanimously. The scheme of arrangement is expected to reschedule the debt and free up some space for capital and recurrent expenditure.

"We recently had a meeting with Zimasco creditors to discuss the scheme of arrangement. They voted in favour of it. The company will be standing alone by end of next month and will no longer be under judicial management. We are just waiting for a handover take over," he said.

Mr Saruchera said Zimasco had posted a profit of more than $ 45 million over a period of 16 months. Since the beginning of the year Zimasco has contributed more than $ 103 million of the country's total chrome proceeds.

"We are happy to announce that we have managed to turn around Zimasco during the first 16 months of judicial management. Zimasco has made a turnover of more than $ 158 million and a profit of more than $ 45 million," said Mr Saruchera.

Zimasco, which is rising from a debt overhang that had buried the group for years and currently under judicial management, has started making efforts towards liquidating debt owed to various creditors while a scheme of arrangement is in the pipeline.

Zimaso owed a total of $144 936 691 to creditors including $21 780 307 to Sinosteel Singapore (in liquidation), $11 350 142 to Sinosteel International and $3 309 850 to the National Social Security Authority, pension funds and NEC. Zimasco owes $34 738 364 to financial institutions, $7 295 513 for retrenchment packages, $2 787 316 towards salaries and wages arrears (three months), among other creditors.

For some debts the company considered rescheduling and repaying over 6,5 years with some over 18 months. These negotiations have been going on and the company expects that a scheme of arrangement could be in place later this month. Zimasco, an integrated ferrochrome producer with chromite mining locations in Shurugwi, Guinea Fowl, Lalapanzi, Mutorashanga and tributor operations along the Great Dyke, has been in the doldrums for the past decade bedevilled but is seeing a turn of fortunes.
- the herald
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