via Zimasco applies for judicial management | The Herald January 8, 2016
Tinashe Makichi Business Reporter
Zimbabwe’s largest ferrochrome producer, Zimasco, has approached the High Court seeking to be placed under judicial management. The company identified Grant Thornton managing partner Reggie Saruchera as the judicial manager.
Zimasco general manager (Administration) Clara Sadomba yesterday confirmed that an application was made to the High Court.
“An application to place the company under judicial management was made to the High Court. There are, however, issues that are still to be finalised,” said Ms Sadomba.
The application came after the giant ferrochrome producer failed to service debts that had ballooned to over $65 million.
Zimasco’s indebtedness to banks and creditors gradually increased from $38 million in 2009 to $65 million in 2015 and servicing these debts has been the company’s greatest challenge.
If placed under judicial management the company will be able to properly pay its debts and turnaround its fortunes.
When operating at full capacity the ferrochrome producer has an average annual turnover of about $200 million.
Zimasco, a unit of China’s Sinosteel Corporation recently stopped operations at its ferrochrome refinery in Kwekwe after switching off furnace numbers five and six.
These were the only running smelters as the company had already switched off other furnaces due to low cash flows resulting from subdued international ferrochrome prices.
Despite shutting down the furnaces, Zimasco, the country’s largest ferrochrome producer in terms of capacity, said tributor and contractor mining operations will not be stopped as long as tributors and contractors are able to secure third party buyers.
The company has the capacity to produce 180 000 tonnes of high-carbon ferrochrome a year, or 1,2 percent of global production, according to its website.
Zimasco operates a ferrochrome refinery in Kwekwe as well as mines along the Great Dyke range stretching from Lalapanzi and Shurugwi in the south to Mutorashanga in the north.