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Senior Business Report
Ingwebu Breweries has been granted authority to convert a local currency denominated loan facility to US dollars.
The Bulawayo Municipality beverages manufacturing company secured a loan in local currency equivalent to USD2,5 million from Ecobank.
The bank approved the request by the company to convert the loan which is guaranteed by council to United States dollars.
Town Clerk, Mr Christopher Dube reported on January 27, 2023 that the local authority on July 7, 2021, authorised a loan guarantee of USD2,5 million (ZWL equivalent at the prevailing auction rate) for Ingwebu Breweries which they had secured from Ecobank.
The USD2,5 million had been drawn down to USD1,9 million.
“Ingwebu Breweries later approached council requesting approval to convert the loan from ZWL to US$.
“The request was precipitated by the delays in getting the foreign currency and the prohibitive costs associated with servicing of the ZWL loan.
“The interest rates changed from the 40 percent at the inception of the loan to 200 percent which was now very expensive compared to the 12 percent interest rates in US$ offered by Ecobank,” reads part of the council report.
“Furthermore, the advantage of the loan conversion was that the loan repayment would be done in United States dollars.
The council has since authorised Ingwebu Breweries to convert the ZWL loan facility to US$ and granted the Chamber Secretary, Mrs Sikhangele Zhou and the Mayor, Councillor Solomon Mguni authority to sign documents to confirm its resolutions to do with loan facility.
Ingwebu Breweries was established in 1946 as a department of BCC and in 1996, council created a wholly-owned business entity called Bulawayo Municipal Commercial Undertaking.
derick.khumalo