adminConrad Mwanawashe Business Reporter
THE Zimbabwe Mining and Smelting Company, once the largest ferrochrome producer in the country and a force to reckon with in Africa, is slowly making its way up to the top again, rising from a debt overhang that had buried the group for years.
Zimasco, currently under judicial management but expects to escape by September, has started making efforts towards liquidating debt owed to various creditors while a scheme of arrangement is in the pipeline.
The scheme of arrangement is expected to reschedule the debt and free up some space for capital and recurrent expenditure.
“Following a relatively good performance by the company over the last nine months, buoyed by an improvement in market prices during Q4 2016 and Q1 17, we have paid a dividend to creditors amounting to $26,7 million or 18,7 percent of total ,” Zimasco general manager – marketing and administration Clara Sadomba said.
In a document titled “Proposals to resuscitate the company” prepared last year, Zimasco proposed to reschedule payments and settle over 6,5 years and moratorium on interest.
The document shows that Zimaso owed a total of $144 936 691 to creditors including $21 780 307 to Sinosteel Singapore (in liquidation), $11 350 142 to Sinosteel International and $3 309 850 to the National Social Security Authority, pension funds and NEC.
Zimasco owes $34 738 364 to financial institutions, $7 295 513 for retrenchment packages, $2 787 316 towards salaries and wages arrears (three months), among other creditors.
For some debts the company considered rescheduling and repaying over 6,5 years with some over 18 months. These negotiations have been going on and the company expects that a scheme of arrangement could be in place by the fourth quarter.
“We are currently working on restructuring the balance of payments to creditors through a scheme of arrangement which should be in place by the fourth quarter. A scheme of arrangement involves a court sanctioned agreement between the parties of how to settle the debt over time,” Ms Sadomba said.
Zimasco, an integrated ferrochrome producer with chromite mining locations in Shurugwi, Guinea Fowl, Lalapanzi, Mutorashanga and tributor operations along the Great Dyke, has been in the doldrums for the past decade bedevilled but is seeing a turn of fortunes.
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