admin
Tawanda Musarurwa
Milling and timber manufacturing company, Border Timbers, says it will remain under judicial management “for the foreseeable future” as a longstanding legal dispute remains outstanding.
The company was placed under provisional judicial management in January 2015 and went into final judicial management in April 2016 after failing to service debts to several financial institutions.
Border Timbers’ exit from judicial management was anticipated this year, but mainly depending on the settlement of an on-going dispute with creditors over US$125 million awarded to the company by the International Centre for Settlement of Investment Disputes (ICSID).
“No finalisation has yet been reached from ongoing discussions with the other party to the claim and with Government,” said the company’s judicial manager Peter Bailey in a statement accompanying its nine-months interims.
“Accordingly, the Company will remain under judicial management for the foreseeable future.”
Border Timbers slipped into the red for the nine-months period to March 31, 2020, posting a loss of $878 000, from a healthy $3,45 million profit in the prior comparable period.
The firm attributed the performance to a poor operating environment, exacerbated by the coronavirus (Covid-19) pandemic.
“The economic environment continues to face many challenges, because of the deterioration of the macroeconomic fundamentals characterised by a weakening local currency and the re-emergence of hyperinflation.
“In addition, the global economies experienced the devastating effects of Covid-19 pandemic, which resulted in lockdown measures that affected both our local and export markets,” said management.
The company’s revenues jump strongly to $182 million in the period, on the back of price increases, up from $20,8 million in the same period in 2019.
Firms have had to constantly adjust prices due to inflationary pressures in the economy.
However, Border Timbers’ total sales, however, dropped to 51 508 cubic metres for both poles and lumber, from 57 212 cubic metres last year.
“Treated poles reflect a decline in production and sales volume compared to same period prior year, this was because of lower demand during half of 2020,” said the judicial manager.
The judicial manager said the company’s “future profitability could no longer be ascertained in the face of a combination of economic challenges including hyperinflation, a weak local currency and the Covid-19 pandemic.”
Online Reporter