Zimasco seeks six-year relief on debt interest

MBCA and Stanbic are owed $3.423 million and $1 056 371,  respectively and MBCA has as security the $4.5 million Special Notarial General Covering Bond over a portion of the slag dump while Stanbic is guaranteed by a $1.5 million pledge over a portion of the chrome ore fines dump in Kwekwe.

According to Saruchera in the report, the ferrochrome giant can be turned around to profitability under the six and half year turnaround plan.

The plan aims to place the company as a low cost producer which will survive even at a time when chrome prices lowers.

Saruchera said a number of reasons contributed to the failure of the company chief among them declining revenues as result of drop in global ferrochrome, drop in furnace capacity utilisation and increased operating expenses.

In addition to that, finance costs and the government’s ban on chrome ore sales which limited the company’s options for sources of revenue, but government has since lifted the ban.

“Due to persistent losses, the company suffered from an acute shortage of working capital and the borrowings attracted interest rates ranging between 10% – 13% during the period 2011 to 2015,” he said.

Meanwhile, Saruchera said the lifting of the ban on chrome ore sales provides a source of other revenue at a time international prices are firming.

He said the company has since secured an export permit of 240 000mt per annum and to date 29 000 mt stockpile of high grade chrome ore has been sold.

Zimasco has capacity to produce more than 20 000 mt per month of high grade concentrates for export.- The Source

Editor’s note: According to The Herald, the judicial manager for Zimasco Reggie Saruchera has ordered a forensic audit of the company to trace the whereabouts of funds generated by the company since its takeover by Chinese shareholders as there are fears of externalization.

“Since the company was placed under judicial management, we have now opened bank accounts to separate pre and post judicial management transactions. We want to carry out a forensic investigation on all the funds that were generated by the company,” he was quoted as saying.

“Obviously the funds must have gone somewhere and we want to ascertain that because money has a tendency of leaving a trail wherever it goes. Our aim is to have a fresh start on the company because we believe that there is potential in reviving it.”

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