On-the-rebound Zimasco engages creditors

KWEKWE-BASED chrome smelting company Zimbabwe Mining and Smelting Company (Zimasco), on Wednesday met its creditors to map the way forward on settling its overdue debts under a proposed scheme of arrangement.

A scheme of arrangement is a courtapproved agreement between a company and its shareholders or creditors. It may affect mergers, amalgamations and may alter shareholder or creditor rights.

The meeting comes after Zimasco, which is under judicial management, made a turnover of more than $158 million in the past 16 months.

In an interview, Zimasco judicial manager Mr Reggie Saruchera of Grant Thornton International said they were now waiting for the outcome of the deliberations before proceeding with the scheme of arrangement.

Mr Saruchera said the scheme of arrangement was expected to reschedule the debt and free up some space for capital and recurrent expenditure.

He said Zimasco had posted a profit of more than $45 million over a period of 16 months.

“This morning (yesterday) we engaged Zimasco creditors on the proposed scheme of arrangement,” said Mr Saruchera. “They have started voting and we will soon have 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.”

The company owes 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.

It also owes $34 738 364 to financial institutions, $7 295 513 for retrenchment packages and $2 787 316 towards salaries and wages arrears (three months).

The company considered rescheduling some debts and repaying them over 6,5 years and others 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 chromites mining locations in Shurugwi, Guinea Fowl, Lalapanzi, Mutorashanga and tributary operations along the Great Dyke, has been in the doldrums for the past decade, but is seeing a turn of fortunes.