HCCL drops rights is­sue dis­cus­sions

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga Se­nior Busi­ness Re­porter

HWANGE Col­liery Com­pany Limited (HCCL) has sus­pended dis­cus­sions in­volv­ing a rights is­sue and pri­vate place­ment as the firm’s process for a scheme of ar­range­ment with cred­i­tors is at an ad­vanced stage.

The col­liery’s debt is es­ti­mated at $300 mil­lion.

In a no­tice to share­hold­ers, HCCL said af­ter con­sul­ta­tions with ma­jor stake­hold­ers and pro­fes­sional ad­vi­sors, it had found it pru­dent to pur­sue a debt man­age­ment plan ahead of any cap­i­tal rais­ing ini­tia­tives.

“As such the com­pany has sus­pended dis­cus­sions in­volv­ing the rights is­sue and pri­vate place­ment and is at ad­vanced stages of a scheme of ar­range­ment with cred­i­tors,” said HCCL.

Once the coun­try’s largest coal pro­ducer, HCCL said pur­suant to grant­ing of the High Court or­der au­tho­ris­ing the con­ven­ing of scheme meet­ings, the firm was fi­nal­is­ing en­gage­ments with its cred­i­tors for a mu­tu­ally ac­cept­able debt man­age­ment plan.

The cred­i­tors and share­hold­ers of the firm would be no­ti­fied in due course of the scheme meet­ing date, time and venue.

“Pend­ing fi­nal­i­sa­tion of the fore­go­ing dis­cus­sions, share­hold­ers and mem­bers of the pub­lic are ad­vised to ex­er­cise cau­tion when deal­ing in the com­pany’s shares and to con­sult their pro­fes­sional ad­vi­sors be­fore deal­ing in the com­pany’s shares,” reads the no­tice. Speak­ing by tele­phone yes­ter­day, HCCL man­ag­ing di­rec­tor Mr Thomas Makore said the rights is­sue was some­thing his or­gan­i­sa­tion will re­visit and con­sider af­ter the scheme of ar­range­ment. “At this stage, we can’t say how much we need to raise through the rights is­sue; the scheme of ar­range­ment will al­low us to re­struc­ture our bal­ance sheet. “In other words, we view the scheme of ar­range­ment as some­thing that will al­low us to un­lock value and raise fresh cap­i­tal,” he said.

Mean­while, the Govern­ment has an­nounced plans to clear a sig­nif­i­cant por­tion of HCCL’s Hwange Col­liery Com­pany’s debts by early next month to pave way for the im­ple­men­ta­tion of new strate­gies aimed at re­viv­ing the com­pany.

Strate­gies be­ing mooted by the Govern­ment in­clude sell­ing some of the com­pany’s houses to em­ploy­ees to off­set salary ar­rears presently sit­ting at $59 mil­lion while $69 mil­lion worth of debt will be con­verted to eq­uity.

The Govern­ment is look­ing at shed­ding off some of the firm’s non-core op­er­a­tions, in­clud­ing ra­tio­nal­i­sa­tion of its work­force from the cur­rent 3 200 to lev­els that are com­men­su­rate with pro­duc­tion. — @okazunga

Hwange Col­liery Com­pany Limited has sus­pended dis­cus­sions in­volv­ing a rights is­sue and pri­vate place­ment

Mr Thomas Makore

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