Shareholders in last bid to save RioZim

short-term debts esti­mated at over US$55 million.
In a circular to shareholders, the group said US$5 million would be raised through the issue of 10 mil­lion rights issue shares at US50c.
An additional US$5 million would be raised through a private placement of 13 325 00 shares to Global Emerging Markets Raintree and US$45 million through convertible debentures to GEM Raintree.
GEM Raintree Investments, a Mauritian-based investment company, will underwrite the rights offer.
“The funds derived from the rights offer and private placement will be applied against the settlement of expensive short-term debt and critical capital expen­diture and working capital for the operations of Empress Nickel Refinery and Renco, which should result in a return to a sustainable cashflow position,” said RioZim.
The convertible debentures would be drawn over a period of five years to fund existing operations, settle debt and finance future projects.
Major shareholders Old Mutual, which controls about 30 percent of the resource firm, are said to be in sup­port of the latest recapitalisation plan. About 47 per­cent of RioZim shareholders last December rejected a plan by management to raise US$659 mil­lion to retire debt and for recapitalisation.
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 of Zimbabwe, Imara Corporate Finance, Renaissance Bank and 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 and was split thus — US$22 million capital and US$4,5 million interest.
But after the collapse of the recapitalisation plan, the banks owed a total of about US$57 million  pushed for the company to be placed under judicial management.
Analysts last week said shareholders have another chance to save the company and that some banks are still fighting for judicial management.
“Old Mutual is supporting this initiative and it still remains to be seen if they will vote in favour of this lat­est plan,” said a Harare-based analyst.