PIONEER Corporation Africa has turned to the productive sector facility to service its $21 billion debt.
which has accrued over the years, is reported to be threatening the transport company’s operations.
Pioneer said the majority shareholders had injected fresh capital into the company in the form of structural support.
“Turning to the debt position, some $21 billion, or 76% of the PCA debt is covered by the productive sector finance, while 15% comprises structural support from the majority shareholders,” it said.
Pioneer said funds owed to its banking partners were still awaiting productive sector finance approval to enable the company to settle with them.
“There is a further balance with a banking partner which is pending productive sector finance approval,” Pioneer said.
The company said it was confident of repaying 30% of the debt, which is due in July and August.
“Approximately 30% of the PSF is due for repayment in July and August. However, management is confident that rollover of this debt in line with the laid down guidelines should be achievable,” the company said.
It said its ability to service the debt was mainly due to its projection of an increase in revenue for the month of June.
“PCA’s level of debt, in the context of monthly revenues which are expected to exceed $11 billion in June, is sustainable, and the outlook for the second half of 2004 is positive,” the company said.
It said the continued prevalence of high interest rates during the first quarter had resulted in the company forecasting a loss in the first half of the year.
Pioneer said the operating environment was characterised by an unattractive exchange rate, dampened demand and slower debt repayment had provided a challenge to operations.
The productive sector facility is an initiative of the Reserve Bank of Zimbabwe to enable companies in distress to borrow for recapitalisation.