Zimbabwe town up for sale for $300 million


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Hwange Colliery Company plans to sell off Hwange Town to raise $300 million for a reboot of its operations and finally settle outstanding wages of $70 million, Parliament heard.

The miner remains in a precarious financial position after reporting a $43.84 million loss in 2017 compared to $89.91 million in 2016.

Board member Ntombizodzwa Masuku, who was accompanied by chief executive Thomas Makore, told the Parliamentary Portfolio Committee on Mines and Energy yesterday that the Colliery requires $500 million to be able to operate at full capacity.

Masuku said the company has several assets in the town, including 5 000 houses occupied by workers, and former employees.

“We will approach the Ministry of Local Government to ask them to purchase the houses so that we clean our balance sheet to pay the creditors, while the workers will be given an opportunity to purchase some of the houses,” Masuku said.

“We have a plan to sell the town to the tune of $300 million and sell some of the houses because the company is in possession of 5 000 houses which we do not need and some of these houses are occupied by some of our former workers.”

Some workers would also be offered houses they were occupying in lieu of the salaries they are owed.

The miner was spending $1,.8 million on salaries for its 2 045 workers every month but needs only about 1 000 employees with retrenchment a possibility, she added.

The last payment to workers was on April 25.

“Our hope is that once we reach our plant production levels we will be on the road to recovery because what we need is capital injection of $500 million and equipment. We also owe government and we are faced with a lot of challenges in terms of maintenance of infrastructure because HCC is maintaining infrastructure like water, roads, the hospitals and others while other coal players are benefiting from the facilities but not paying anything,” said Masuku.

Among the problems faced by the company were legacy debts, frequent breakdown of equipment, and high production costs which were causing the company to fail to break even.

Hwange operates under a scheme of arrangement with creditors agreed to in May last year but is struggling to build financial resources to recapitalise operations.

The company remain engaged over possible takeover of its Coal Gasification Company Coke Oven Battery by Chinese partners. – The Source

(833 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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