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There have been disagreements at RioZim over the amount owing to external creditors for ENR for supplying nickel matte leading to the postponement of its annual general meeting.
It is understood both parties agreed after the costing structures of the project such as electricity was reflecting a loss for RioZim.
A market report by Imara Securities says RioZim management told an analyst briefing last week that Centametall will also acquire the entire inventory at ENR.
This is expected to impact positively on cash flows with an injection of almost US$15 million in deferred sales proceeds.
The inventory is estimated at approximately US$70 million of which approximately US$20 million is in refined form and the balance is in intermediate form.
Due to poor operational performance ENR has accumulated a significant plant inventory. According to the Imara report, RioZim management said they would negotiate with BCL, a Botswana-based mining and smelting company for the supply of raw material (matte).
“Management say cost savings of up to 20 percent can be achieved at ENR through targeted investment in capital expenditure and process optimisation.
“ENR has potential to generate revenue of approximately US$200 million annually and profits of between US$15 million and US$17 million,” read part of the report.
RioZim also said gold production at Renco Mine increased 55 percent from 40kg to 62kg in June. The company is targeting to produce 96kg by December 2012.
Meanwhile, RioZim, which is planning to restructure its current expensive debt through a syndicated loan of approximately US$75 million, is yet to hold its annual general meeting.
It is understood that the ANG notice would be published this week ahead of the expiry of the six-month time limit as stipulated in the Companies Act.
According to the Act, an AGM is supposed to be held within six months after the end of every ensuing financial year of that company or within not more than 15 months after the date of the last preceding such meeting of that month. RioZim which has its year-end in December postponed the AGM that was scheduled May 22, 2012.
However, the Securities Commission of Zimbabwe said if any company fails to hold the meeting within the stipulated time lines they can apply for an extension to the Registrar of Companies.
SecZim said it would strictly enforce its rules and regulations, in particular the listing rules and best practice and encourage companies to disclose to shareholders in detail why such meetings have not been held as required by law.
“Securities Commission and the exchange are in the process of carrying out a review process with in the intention of identifying those companies that have not complied and shall advise the investing public of the outcome,” SecZim said.
Online Reporter