Hwange AGM postponed

issues that need to be addressed by major sharehol- ders.
Mr Valentine Vera, for the Government, which has a 37,7 percent interest in Hwange, moved the motion to postpone the meeting.

He said shareholders needed to deal with the restructuring and other issues before going for an AGM.
“Representing the Government of Zimbabwe, I propose that the AGM be moved to a later date,” he said. “There are issues that are not on the agenda, which include restructuring of the company, that have to be addressed by the major shareholders before going for an AGM.”

Mr Nick van Hoogstraten, with 26 percent stake, seconded Mr Vera’s motion.
Sources say major shareholders were not given the 28 days notice of the AGM as required by the Act or the Articles of Association.

The notice of the meeting was published on June 8, 2011.
The two shareholders that supported the postponement of the AGM hold 63 percent stake in the company.

Mr van Hoogstraten said the postponement was “in the best interests” of the company.
The ordinary business of the AGM was to receive the financial statement for the period ended December 31, 2010 and the re-election of directors.

It was also to confirm directors’ fees and to elect auditors for the ensuing year.
An Extraordinary General Meeting preceded the AGM where all the resolutions on the agenda failed to garner the support of shareholders.

At the EGM, directors were seeking to increase the company’s share capital of 186 million ordinary shares of a nominal value of US$0,25 each to 204 million for a nominal value of US$0,25 each.
Directors were also seeking shareholders’ approval to place 18 million shares of US$0,25 each under the control of the directors for the sole purpose of the HCC Employee Share Option scheme.

Shareholders also refused to give directors the authority to purchase the company’s own ordinary shares issued under the Employee Share Option scheme.
Hwange has been failing to secure funding when they are seeking additional coal concessions against the backdrop of increasing competition from holders of new special coal mining grants.
Hwange has been financing its recapitalisation initiatives through short-term facilities due to the absence of long-term capital on the local market.

For the financial period ended December 31 current liabilities had increased from US$58,3 million in the previous year to US$88,2 million.
The largest chunk was from trade creditors and borrowings.
This shows that the company is under capital stress.

Last year, Hwange said its long-term recapitalisation was dependent on an audit of its local resources and reserves.
Hwange has been in talks with development banks for possible funding/ the company has been struggling to get funding since the hyperinflationary environment.
The company at one time sought US$75 million from the Development Bank of South Africa.