Vusumuzi DubeJudith Phiri
Business Reporter
PROMINENT cement manufacturer Khayah Cement Limited has recently entered corporate rescue proceedings, appointing Mr Bulisa Mbano from Grant Thornton (Zimbabwe) as the corporate rescue practitioner.
The decision, initiated voluntarily by the company earlier this month aims to address pressing operational and financial challenges.
The corporate rescue initiative, permitted under the Insolvency Act, seeks to restructure the company’s operations, protect the interests of stakeholders and prevent liquidation.
In an official notice, Mr Mbano explained that during this period, no legal proceedings or enforcement actions against Khayah Cement, or related to any property belonging to the company, may be initiated without his authority.
Following the approval by the Master of the High Court to extend the notice period for informing affected parties to 31 January 2025, Mr Mbano scheduled the first meeting of creditors and stakeholders for 19 February 2025 in Harare.
The meeting will cover proof of claims, an overview of the corporate rescue proceedings, a statement from the Master of the High Court regarding the reasonable prospects for rescuing the company and the appointment of a creditors’ committee.
Individuals owed money by the company are required to complete an affidavit for Proof of Claim Form, which must be filled out in duplicate, accompanied by all supporting documents, and submitted to the Master of the High Court.
In a recent update, Khayah Cement cited unexpected equipment failures, particularly affecting the Vertical Cement Mill and the kiln, as significant contributors to its current troubles.
The Vertical Cement Mill, designed for energy-efficient production of fine powders and the critical kiln, which was mothballed in 2023, have experienced major breakdowns. This situation forced the company to shift to a grinding station model, relying on costly imported clinker—essential for cement production—which has significantly increased operational costs.
The challenges have been exacerbated by sanctions imposed on one of Khayah Cement’s consortium members, which holds a controlling stake in the company. Sanctions from the United States Office of Foreign Assets Control (OFAC) against Fossil Agro, Fossil Contracting, and Obey Chimuka have led to trade restrictions impacting the firm’s ability to operate smoothly.
The company noted that these restrictions have resulted in the withdrawal of vital support from financial institutions, as well as the disengagement of key suppliers leading to increased costs for goods and services.
Consequently, mounting pressure from creditors over prolonged outstanding debts has led some to take legal action.
In light of these circumstances, Khayah Cement emphasized that it had no choice but to enter into challenging payment arrangements to mitigate potential legal repercussions and protect its assets and reputation.
Bongani Ndlovu