Border Timbers in CSD debut

HARARE - Zimbabwe Stock Exchange-listed agro-industrial concern, Border Timbers, is set to make its debut on the Central Securities Depository (CSD) next week.

The CSD system maintains securities in electronic format in investors’ accounts, allowing their transfer from one party to the other through an automated book entry.

Border Timbers — which is under judicial management — will have its trades cleared and settled through the CSD.

“Shareholders, capital market players and the investing public are hereby advised that Border Timbers Limited securities will be cleared and settled on the Central Securities Depository (CSD), in an electronic form,” Border Timbers judicial manager Peter Bailey said.

The firm’s trading on the CSD will see Border Timbers being integrated into the country’s sole depository platform which operates under a custodian model as opposed to the retail model where investors have a direct interface with brokers.

Border Timbers — which widened its net losses after tax in the first half of 2016 — is now operating profitably and working on a new scheme of arrangement with creditors, according to its judicial manager.

Under the CSD’s custodian model, Border Timbers investors will have a choice of either going directly through a custodian for the purchase of shares, through a broker.

According to Bailey, the firm’s new scheme is only being delayed by a major foreign creditor who is still consulting on the planned programme.

Once approved, the new scheme will include provisions of an eight-year payment period in particular for staff and other statutory bodies while those in contractual agreements will have separate plans.

Border Timbers’ liabilities comprise mainly of deferred tax of $30 million arising primarily from the biological assets, while borrowings were in excess of $20 million.

The company’s $6 million debt to FBC Bank, NMBZ and Ecobank was in November 2015 absorbed by the Zimbabwe Asset Management Corporation, a special purpose vehicle created by the Reserve Bank of Zimbabwe in August 2014 to absorb non-performing loans in the banking sector.

Net cash generated from operating activities marginally increased to $3,9 million from the previous year, but due to the effects of forest fires in the company’s timber forests in the Eastern Highlands, the group posted a loss.

Overall, demand for the firm’s products remains strong in the region and beyond with new markets being explored in West and Central Africa.

The company requires at least $10 million in fresh capital.

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