ZIMASCO ENGAGES CREDITORS ON SCHEME OF ARRANGEMENT
Kwekwe-based chrome smelting company Zimbabwe Mining and Smelting Company (Zimasco), met its creditors yesterday to deliberate on the proposed scheme of arrangement. This comes after Zimasco, which is under judicial management, made a turnover of more than $ 158 million within the past 16 months.
In an interview, Zimasco Judicial Manager,Reggie Saruchera of Grant Thornton International, said the ferrochrome producer was now waiting for the outcome of the deliberations before proceeding with the scheme of arrangement. Mr Saruchera said the company had also invited its creditors for a scheme of arrangement yesterday to map the way forward on how to settle the debts.
The scheme of arrangement is expected to reschedule the debt and free up some space for capital and recurrent expenditure. 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.
“This morning (yesterday) we engaged Zimasco creditors on the proposed scheme of arrangement. They have started voting and we will soon hear the outcome. The outcome will help us map the way forward. 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. This is why we are now engaging our creditors,” 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. 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 but is seeing a turn of fortunes.