Zimglass engages two regional partners
Martin Kadzere Senior : Business Reporter
ZIMGLASS has approached two regional companies to invest into the country’s sole glass producer as it seeks to re-open its Gweru based factory, an official said yesterday. Zimglass, which was placed under judicial management in August 2014, requires as much as $10 million to refurbish the plant, judicial manager Mr Winseley Militala said.“A lot of money is needed to restart operations and we have written to some companies in the region to consider our offer,” said Mr Militala. “One of the companies has responded by visiting the factory and we are providing them with information.”
While Mr Militala could not disclose the identity of the companies, The Herald Business understands that Nampak Ltd of South Africa and Kioo Ltd of Tanzania are the companies that have been approached. “It’s still very early to talk about it,” said Mr Militala.
Last year, Militala had recommended liquidation of the company instead of a $3 million offer by an investor to buy the firm’s book assets. Mr Militala said, the investor, Sahara Holdings had made a conditional offer to purchase the book assets of Zimglass, as opposed to the entire business including assets and liabilities. Initially, Sahara, through its Mauritius registered investment vehicle, Ekhaya had mandated Trustlink International of Mauritius to raise $10 million to acquire the company.
The offer was on condition that Zimglass would provide a detailed due diligence report to ensure the assets are free from any additional encumbrances and material defects.
Sahara also wanted an undertaking from Government that proper protection will be provided, as well as dealing with all the legacy issues at the company. It also demanded a satisfactory report on the technical viability by the investor’s technical partner.
Mr Militala said it was in the best interest of the stakeholders to wind up operations.
Mr Militala said Zimglass was a specialised plant that could only be sold to entities involved in glass production. He argued that the extent of indebtedness was so large and as such scares potential investors, as well as raise doubts as to future viability.
Zimglass’ liabilities stood at $30,2 million as at June 2015, against assets at $2,2 million.
The company has installed capacity to produce about 240 tonnes of glass material for bottles of beer, soft drinks, food, liquor, pharmaceuticals and kitchenware per month.