TINASHE MAKICHI
ZimAlloys has structured repayment terms with its foreign creditors as it moves to extinguish the US$10m debt to access new funding for the ferrochrome producer.
The clearance of the foreign debt comes after ZimAlloys cleared its obligation with local creditors following the acquisition of 68% in the ferrochrome producer by a consortium of local investors.
The ferrochrome company is currently under administration of Grant Thornton Zimbabwe.
“We are in the process of settling those foreign debts but to date we have since agreed on repayment terms with some foreign creditors.
What is left now to be paid is around US$10 million but I don’t have the cumulative figure off-hand,” Bulisa Mbano of Grant Thornton Zimbabwe told Business Times.
The administrator last year terminated a US$100m investment deal which the chrome smelting company entered with Indian Investor, Balasore Alloys Group after the Asian company failed to honour its commitment.
While efforts to secure an investor have been ongoing, the ferrochrome miner was also working on its dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, Jinan in a deal worth about US$2.3m.
In addition, the ferrochrome miner was also looking at initiatives to secure funding for refurbishment of its furnaces at the Gweru plant.
This initiative was to see the miner engaging its customers and international financiers in raising funding. ZimAlloys is slowly awakening as it has devised a turnaround strategy which will see a self-reincarnation of the company.
Benscore, which is owned by businessman Farai Rwodzi, acquired ZimAlloys from AngloAmerican Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.
The former Anglo American Plc ferrochrome producer, which stopped operations in 2008, was placed under provisional judicial management in July 2014.
The company was then put under final judicial management in November the same year after the ferrochrome producer’s debt had risen to alarming levels.
However, bad debt-buying company, Zimbabwe Asset Management Company in 2016 agreed to take over US$21m worth of the group’s non-performing loans which were sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.
ZimAlloys together with Zimasco jointly controls the majority of Zimbabwe’s chrome ore claims, mostly found along the Great Dyke.
ZimAlloys has since ceded part of its ferrochrome reserves in response to government’s directive to Zimasco and ZimAlloys to cede part of their chrome claims.
