TINASHE MAKICHI
PPC Zimbabwe parent company, PPC Limited, is seeking fresh funding to strengthen its balance sheet, a move which will improve its future investment prospects.
In a cautionary statement to shareholders this week, PPC Limited said the company was making good progress on the project which entails negotiating funding arrangements with lenders with the hope of coming up with a restructuring and refinancing structure.
Although PPC Limited did not disclose the nature of the funding arrangements, it is believed that the company was seriously considering a rights issue to strengthen its balance sheet and refinance both domestic and regional operations including Zimbabwe operations, sources familiar with internal discussions over the matter told Business Times this week.
PPC, however, warned shareholders to continue exercising caution when dealing in securities of PPC until the funding arrangements with its respective lenders are finalised.
“PPC is able to report that it continues to make good progress against key milestones on the project.
Shareholders are advised to continue exercising caution when dealing in PPC securities until funding arrangements with respective lenders are finalised and details of the proposed restructuring and refinancing are published,” PPC Limited said.
PPC has operations in South Africa, Botswana, DRC, Ethiopia, Rwanda and Zimbabwe.
PPC Zimbabwe operates facilities in Harare, Bulawayo and Gwanda.
PPC Limited’s capacity is around 11.5m tonnes of cement products each year and its materials business comprises Pronto Readymix (including Ulula Ash) and 3Q Mahuma Concrete.
The cement group’s footprint in the readymix sector has grown to include 26 batching plants across South Africa.PPC also produces aggregates with its Mooiplaas aggregates quarry in Gauteng having the largest aggregate production capacity in South Africa.
PPC Lime, one of the largest lime producers in the southern hemisphere, produces metallurgical-grade lime, burnt dolomite and limestone.
PPC Zimbabwe has made significant investments in Zimbabwe in recent years, with the Harare manufacturing plant being commissioned three years ago.
This could be a sign that PPC is in Zimbabwe for the long haul.
The Harare factory boasts top of the range equipment and facilities and has helped extend PPC Zimbabwe’s capacity to 1.4m tonnes of cement a year.
The factory incorporates bulk-handling and palletising technology which can pack 40 cement bags per minute.
Zimbabwe’s cement industry comprises of five companies — PPC Zimbabwe, which has a milling capacity of 1.4m metric tonnes per annum, Lafarge Cement (400,000 tonnes per annum), Sino Zimbabwe Cement (350,000 tonnes per annum), Livetouch (400,000 tonnes per annum) and Pacstar Cement (80,000 tonnes per annum).
