RioZim share price up 90pc

picking up US2c in yesterday’s trades to close at US57c. The firm, among the worst performing counters in 2011, dropped from US190c to US30c.
RioZim says they have accepted an offer, approved by major shareholders that will provide sufficient funds to solve the company’s indebtedness and provide the way forward.
A consortium of local banks owed about US$50 million by RioZim have continued to put pressure to place the mining giant under provisional judicial management. A section of shareholders has maintained that the move by the banks would be opposed by the company and major shareholders. 
Mining stocks on the Zimbabwe Stock Exchange had a poor run throughout last year into the New Year as all resource counters struggled to secure funding to capitalise operations.
Other counters, Bindura and Hwange, are struggling to recapitalise with Hwange seeking up to US$100 million. The coal mining company is reportedly negotiating for a US$20 million loan facility with the Development Bank of South Africa.
BNC majority shareholder Mwana Africa is seeking equity to finance operations.
Falcon Gold is the only company that managed to secure funding from shareholders, although the US$2 million raised was not enough to recapitalise entire operations.
Shareholders last year rejected a proposal at an Extraordinary General Meeting to consider a US$59 million rights offer and a debt retirement strategy.
Of the US$59 million, RioZim wanted to raise, US$29 million would go towards clearing debt, US$11,6 million to working capital, US$13,6 million to capital projects while US$13 million would recapitalise operations.
About US$13,96 million had been earmarked for Renco, US$4,22 million for Empress Nickel Refinery and US$4,8 million was needed for Cam & Motor Mine.
After the recapitalisation, US$28 million would be left in more attractively priced debt.
Some of the banks which advanced loans to RioZim included BancABC, Kingdom Bank, Metropolitan Bank, Trust Bank, Tetrad, ZB Bank, Ecobank, the Infrastructure Development Bank, Imara Corporate Finance, Renaissance Bank and the Afreximbank.
Total debt amounted to US$57 million with the principal at US$30,15 million and interest of US$26,85 million.
At the end of the full year to December 2010, total borrowings amounted to US$49 million, with the principal at US$34 million and interest of US$15 million. In 2009 it amounted to US$26,5 million,
Meanwhile, the industrial index was 0,35 percent firm at 148,12 points following gains in heavyweight counters. Minings closed 3,61 percent at 94,48 points after Hwange retreated US2c to US30c. RioZim was up US2c to settle at US57c while Bindura and Falgold were unchanged at previous trading levels.