ART to restructure debt

In results for the half year ended March 31, 2013 ART chairman Mr Passmore Matupire said the successful conclusion of debt initiatives being pursued should result in more stable business.

“The board is still actively pursuing initiatives to reduce and restructure debt.

“These include disposal of land and buildings in Mutare, external equity investment and restructuring of the US$3 million short term debt into long term,” he said.

Mr Matupire said total value of these transactions was expected to reach US$7 million.

The group last year announced at an analysts briefing that it would convert part of its short-term debt into long-term and dispose of subsidiary Mutare Board & Paper Mills and Zambia Building as part of strategies to retire the debt burden.

Mr Matupire said during the half year to March 2013, the group reduced debt by  US$1,045 million using proceeds generated from disposal initiatives.

Consequently, the group recorded a profit for both the full year to September 2012 and the period under review.

A profit after tax of US$286 000 was recorded for the half year to March 2013 with cash generated from operations of US$1 278 million. “Operationally the group has benefited from discontinuance of loss-making operations, which has resulted in improved margins and reduced operating costs,” the chairman said.

ART is the holding company of a manufacturing group of businesses in Zimbabwe with distribution operations in Malawi, Zambia, Zimbabwe and South Africa. Its batteries unit, Chloride Zimbabwe, achieved a turn-over of US$5,6 million during the period under review, which was a 9 percent increase from the prior year. This was due to increased vehicle population.”

Meanwhile, external auditors Ernst & Young have issued a modified review conclusion on the financial results saying the group’s current liabilities exceed current assets by US$2,58 million.

The auditors said these conditions indicate the existence of a material uncertainty which may cast doubt on the group’s ability to continue as a going concern. – New Ziana.