VICTORIA FALLS – Troubled Hwange Colliery Company Ltd has gone into administration, just months after it suspended its managing director.
Hwange, which is majority owned by the Zimbabwe government, will be subjected to a reconstruction exercise announced in an extraordinary Government Gazette published on Monday by Justice Minister Ziyambi Ziyambi.
Ziyambi, acting in terms of section 4 of the reconstruction of State-Indebted Insolvent Companies Act (Chapter24:27) (No.27 of 2004), appointed Bekithemba Moyo, the co-founder and director of DBF Capital partners as the administrator of the company.
Other members of his team include will be lawyer Mutsa Mollie Jean Remba of Dube, Manikai and Hwacha and Munashe Shava, who is the chief operating officer and project leader for Great Dyke Investments, Ziyambi announced.
Ziyambi, in the notice, said “from the date of publication of this order, the company under reconstruction shall be under the control and management of the administrator, and the boards of the companies under reconstruction shall be divested of the control and management of the companies’ affairs and any person managing or controlling the companies’ affairs in any capacity other than as simply a member of the board referred to above shall continue in the office subject to the control and direction of, and be answerable to, the administrator.”
In May, Hwange suspended managing director Stenjwa Thomas Makore pending a disciplinary hearing into alleged financial impropriety.
Shepard Manamike as the acting managing director.
The reconstruction plan is a last-ditch effort from saving the coal miner, whose liabilities now far outstrip its assets.
Hwange Colliery narrowed its loss position by 51 percent to $43.84 million in 2017 compared to $89.91 million the previous year on reduced cost of sales and increased revenues.
The company’s legacy debt amount to over $350 million and is operating on old inefficient equipment which has resulted in high production costs. To offset the debt which includes over $70 million owed to employees in salary arrears dating back to five years, the coal company mid this year proposed to sell Hwange Town for $300 million.