Hwange Colliery narrows loss to $28 million

Hwange Colliery Company has narrowed its loss by 36 percent to $28 million in the six months to June, from $44 million in the comparable period last year, the company said today.

Revenue fell 30 percent to $24.5 million as total sales came registered a 15 percent decline to 585 689 tonnes due to working capital constraints. The financial results were unaudited.

Administrative costs during the half year period under review went down by 79 percent to $7.5 million driven by cost containment measures.

Hwange chairman Winston Chitando said the struggling miner is working on a scheme of arrangement to liquidate amounts owed to creditors and possibly return to profitability.

“The scheme is due to be finalised with the company’s creditors in the last quarter of this financial year. It is predicted that the scheme will ensure that there is a structured plan for paying the company’s debts, ” said chairman Winston Chitando.

The company’s borrowings stood at $17 million from $5.9 million while litigation cases amounted to $44.9 million.

Chitando added that the company is in talks with a local bank to secure a $6.3 million loan to refurbish its underground mine.

Total assets decreased by 17 percent to $224 million.

Government, the major shareholder in Hwange with a 37 percent stake, has intimated on plans to restructure the colliery and strip off its auxiliary assets.

In 2014, the company rejected a $50 million loan from Nicholas van Hoogstraten, a 30 percent shareholder in Hwange, citing stringent terms and the British tycoon’s insistence on a five-year management contract at the colliery.-The Source

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