Art battles to repay forex-denominated debt

Eric Chiriga

AMALGAMATED Regional Trading Holdings Ltd (Art) says the operating environment in Zimbabwe continues to pose serious challenges to business.



Helvetica, sans-serif”>It said the environment remained tough and that demand patterns have become inconsistent.


Art chairman, Passmore Matupire, said the foreign currency situation continues to affect their ability to maintain plant efficiencies.


“The operating environment continues to present immense challenges. Market demand patterns have become erratic,” Matupire said.


He said the company had accumulated a significant backlog of retooling and plant replacement work particularly in the paper mills and stationery factory.


“The relatively high cost of borrowing and falling income has led to a more conservative market,” he said.


Matupire said the group was facing problems in repaying foreign currency-denominated debt and creditors.


The inability to repay the foreign currency-denominated obligations resulted in the group recording foreign currency translation losses of $35 billion compared to exchange gains of $2 billion in 2004.


“The major area of concern for the board during the past year and into the immediate future,” Matupire said, “is the group’s inability to repay foreign currency denominated debt and creditors.”


This had led to significant investment of time in managing relationships with lenders and creditors with overdue accounts, he said.


Before the introduction of the interbank rate system, most companies were struggling to access foreign currency on the foreign currency auction system, with more than 80% of the bids rejected.