RioZim seeks to reschedule crippling debt

Resources group RioZim says it is engaged in negotiations to reschedule its $45 million debt and expects to conclude the arrangement by the end of the third quarter this year.

Last year the company reported a $18 million loss after incurring finance costs of $9.4 million.

Chief financial officer, Bheki Nkomo said today that the company is being squeezed by expensive short-term debt but was working on an arrangement to reschedule.

“We have engaged certain financial institutions that can help us restructure that debt and we are in the process of concluding that such that it becomes a five-year instrument at a lower cost which we estimate will be half of what we are paying now,” Nkomo said.

“We are currently paying 18 percent per annum and this structure which we are working on should achieve something close to half for a longer tenure and we expect to close this structure at the end of the third quarter.”

Finance costs in Zimbabwe remain high with some institutions charging as much as 40 percent.

The central bank, however, last month capped interest rates at between 6 and 10 percent to stimulate productivity.- The Source

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