COAL producer, Wankie Colliery, is struggling to service its £6,5 million external debt.
Wankie’s marketing an
d public relations manager, George Nkala, confirmed that the company owes funds to external financiers.
“Yes we do owe £6,5 million to financiers such as the Commonwealth Development Corporation and others,” said Nkala.
Wankie has had long business relationships with the London-based Commonwealth Development Corporation and other financiers.
The financiers are reported to have raised concerns over the failure by the coal miner to service its debt especially after the withdrawal of Zimbabwe from the Commonwealth last year.
The funds are reported to have been borrowed as part of the company’s recapitalisation exercise to complete its feed of gas to Hwange Power Station.
The company is reported to have approached its financiers to negotiate repayment terms after it failed to meet the initial terms of the contract.
In its financial statement, Wankie said it had overdue financial obligations with overseas creditors.
Nkala said the company was looking at ways to finance the ballooning debt in the long-term.
“We are looking at ways of financing the debt and have had offers from interested parties. We have already put up a committee to look at the offers,” said Nkala.
“We wanted the funds to finance the construction of the feed to Zimbabwe Power Company and the company is supposed to repay the funds.
“The problem has been finding the foreign currency to invoice the power utility as part of our claims. Zesa has agreed to pay,” said Nkala.
Wankie is currently trying to raise US$25 million for its new underground mine and another US$8 million to recapitalise its existing mining operations.
Wankie Colliery is listed on the Zimbabwe, Johannesburg and London stock exchanges and is currently trading at around $390 on the local bourse.