Maamba Colliers admits owing ZCCM US$10m

MAAMBA Colliers Limited has admitted owing ZCCM Investment Holdings US$10million it borrowed for purposes of meeting its creditors’ obligations.

In this matter, ZCCM IH has asked the Lusaka High Court to order Maamba Collieries Limited to pay damages, interest, costs and any other reliefs that the court might deem fit for failure to pay the debt.

But in its defence, Maamba Colliers said the loan was at the request and instance of Industrial Development Corporation Limited IDC which was tasked by the Ministry of Finance and National Development to procure funds for ZESCO Limited to settle its indebtedness to the defendant, which exposure was causing imminent default on the part of Maamba with its diverse financing agreement.

Maamba collieries stated that after the disbursement of the loan ZCCM IH sent a term sheet and an agreement called (liquidity support agreement) in respect of the advance which provides that the sum o US$10million would be repaid by the defendant within 7 days of receipt of the bulk payment, from its debtor ZESCO Limited.

According to the defendant both its letters dated March 20 2019 and the term sheet, the repayment of the loan to ZCCM IH was conditional on receipt by the defendant from ZESCO Limited which payment has not been received to date.

Maamba further stated that their financier, ZCCM IH and Nava Bharat (Singapore) executed an agreement called sponsor support agreement (SSA) where it was agreed among other things to subordinate any loan, advance or claim against the defendant to the loan facilities extended by its financier’s priority.

In the same agreement, Maamba undertook not to pay any monies to any shareholder in respect to of any shareholder loans. Maamba has since argued in the alternative that it shall seek protection from ZESCO which currently owes the defendant the sum of US$232.000.000 million.

In its statement of claim, ZCCM-IH claimed that as a result of Maamba Collieries failure to repay the demanded sum, it has suffered loss of use of its monies and inconvenience as the loan was advanced with the understanding that it would be recovered within the shortest reasonable time.