Martin Kadzere Senior Business Reporter
THE Reserve Bank of Zimbabwe intends to issue Treasury Bills to creditors of Hwange Colliery Company Ltd to avoid litigations that could result in attachment of its assets.
Sources at the central bank told The Herald Business that Hwange’s trade creditors would be issued with TBs, which they can liquidate on maturity or use as security to borrow, but at a discount. Hwange owes various creditors in excess of $60 million.
“It is a matter under discussion but that is how the central bank intends to help the company,” said the source.
Government is a major shareholder in Hwange, holding about 37 percent equity in the company.
No official comment could be obtained from Hwange and the RBZ by the time of going to print.
Last month, Hwange had property worth $2 million attached after it failed to pay for the installation and use of software in breach of contracts the company signed with three software providers.
Recently, workers filed an application to have the company placed under provisional judicial management
but Mines and Mining Development Minister Walter Chidhakwa said the route was not the most viable one and instead advised the management to pursue other means of reviving the company.
“I don’t think you should accept a situation where something dies in your hands; the company which your forefathers left you 115 years ago to face possible closure at your watch,” said Minister Chidhakwa.
“I want to ask you to give the
company a chance by withdrawing
the application for judicial management you filed with the High
In its efforts to turnaround the business, the Government has agreed to underwrite the company’s rights offer and has already granted more mining concessions to the company.
The new concessions, with an estimated underground resource of one billion tonnes, according to an independent competence report done
by SRK Consulting, is expected to increase the life span of the coal mining firm by more than 50 years, the company said.
The Zimbabwe Asset Management Company, a subsidiary of the RBZ has also taken over some of Hwange’s debts amounting to about $15 million, according to the central bank.