Zimasco plans to exit judicial management

ZIMBABWE`S largest chrome producer, Zimasco plans to exit judicial management and resume normal operations in the fourth quarter of this year.

The mooted move is on account of a successful resuscitation strategy implemented by the provisional administrators.

Zimasco was placed under provisional judicial management in June 2016 after its indebtedness to banks and creditors had increased to about $65 million in 2015 from $38 million in 2009.

Judicial manager Reggie Saruchera, told The Herald Business that the company is working on a scheme of arrangement to pay creditors in the next three years.

“We are working on a scheme of arrangement which is designed to reschedule debt and to pay creditors over a period of three to four years.

“After we conclude that scheme of arrangement (sometime in September) we will then apply for judicial management exit,” said Mr Saruchera

Zimasco earlier this year paid out about $20 million to its creditors who comprise private companies, state authorities and financial institutions as the ferrochrome producer begun to implement its turnaround plan.

“We are excited that in the first 11 months of judicial management we realized a cash generation position of $27 million, which we passed on to creditors.

“So at the moment most of the money due and payable to the retrenched employees has been paid out, about 10-15 percent is remaining,” said Mr Saruchera

Mr Saruchera highlighted that Zimasco furnaces are operating at full capacity including those leased to Portnex.

In February the company’s smelting infrastructure was running at 80 percent capacity producing high carbon ferrochrome compared to the 37 percent production capacity recorded in 2015.

Zimasco is running two furnaces at its East plant at full capacity and is leasing three of its furnaces at its West Plant to Portnex International.

The ferrochrome miner last year secured an export licence that will see the company exporting 240 000 metric tonnes of the mineral per annum.