Reprieve for ailing coal miner Hwange

HARARE - Troubled coal miner, Hwange Colliery Company Limited (HCCL), says its creditors have voted to form a scheme of arrangement saving the firm from judicial management.

HCCL scheme chairperson, Andrew Lawson, last week said that out of the 80 creditors who attended the voting meeting, 95,9 percent voted for the scheme which will see the embattled coal miner staggering payments to honour debts worth over $310 million debts.

While 71 creditors gave the scheme a green light, eight were against the scheme while one abstained from the vote.

The scheme has also saved HCCL — presently reeling from litigation over the debts  — from a public auction of its assets by creditors who were baying for blood over debt non-payment.

The Zimbabwe and Johannesburg-listed coal miner’s managing director, Thomas Makore, said the scheme’s documents have since been submitted to the High Court for sanction.

“The Scheme of Arrangement documents were submitted to the High Court for sanction. Thereafter it will be implementation of the scheme plan,” he said in a statement.

Enabling the struggling firm to borrow money from banks for working capital, the scheme will also see HCCL restructure its liabilities.

“The company’s assets are protected through the Scheme of Arrangement.

“As part of its strategy, the company will convert current to long term liabilities and seek working capital facilities from banks,” the HCCL boss said.

HCCL also expects the scheme to unlock other potential capital avenues and has anchored its outlook on the successful implementation of a mutually beneficial scheme.

According to the HCCL boss, the group’s main focus is to supply coal to the national electricity utility with a medium term look at exports.

“Adequate supply of coal to the national electricity utility will remain a priority while supply of profitable coal and coke grades to industry and export markets will ensure that the company operates profitably and meets its obligations in terms of the Scheme of Arrangement and monthly operating expenses,” he said.

To satisfy its agreements, HCCL needs to reach an annual output of about 5,5 million tonnes from the present approximately two million tonnes.

This comes as the coal miner recently got a $7 million loan from the central bank to service remuneration arrears accumulated over a 23-month period.

Deputy Labour minister, Tapiwa Matangaidze, recently told the National Assembly that the struggling coal miner — due to retrench nearly a third of its 3 000 workforce — was working on servicing over $10 million outstanding salary dues.

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