Steelnet creditors seek to nullify provisional sale

STEELNET creditors this week came out guns blazing seeking to nullify the provisional sale of the beleaguered company’s two units — BMA Fasteners (BMA) and Tube & Pipe — citing serious undervaluation of the businesses.

Report by Taurai Mangudhla

The creditors on Wednesday met the Master of the High Court for the first liquidation meeting to get confirmation on all claims that were not made during the provisional judicial management stage.

Tube & Pipe industry workers committee chairperson Kaiton Mateyasanwa said Tube & Pipe alone had initially been valued at US$5 million but only got offered to the highest bidder  for US$2,1 million, a figure the workers’ grouping feels is a pittance.

“We also understand the highest bidder is a shareholder in Steelnet who failed to inject money into the business to remain afloat so he/she could have wanted it to collapse. He/she is even claiming US$300 000 as a creditor,” Mateyasanwa said.

“We wish if it’s possible we can find other bidders with more money to buy the business.”

Steelnet provisional liquidator Christopher Maswi of Fairvalue Management Consultancy Private Ltd welcomed the idea, emphasising both bids, including that of BMA at US$1, 8million, were only provisional and not yet finalised.

Maswi said the low bids were because this was a forced sale and the company was on its knees, adding there was still room for new bids with players who provide adequate proof of financial capacity to make the purchase.

“If there is something that is better, I don’t think anyone should be against it. What we have got is the best that we could get and other bidders had to let go because the liquidity situation has changed and we have to look at the fact that reality is bad,” he said.

“These sales will be approved at the next creditors and shareholders’ meeting which will be announced in due course and in line with High Court procedure.”

Disposal of Steelnet’s other unit, Hastt Zimbabwe, which is yet to find bidders is also expected to be finalised when BMA and Tube & Pipe disposals are confirmed.

Previous reports have indicated Steelnet creditors are owed in excess of US$8 million while its assets are close to US$11 million.

CBZ Bank Ltd is among Steelnet’s major creditors with claims worth US$1,4 million, while outstanding workers’ salaries and wages topped US$2,4 million since 2009 when the company succumbed to a myriad of operational challenges. During this week’s creditors meeting, BMA workers claimed more than US$1,2 million while the National social security Authority claimed more than US$250 000.

State owned fixed telephone line provider TelOne was also among the creditors with claims worth US$26 000 while Africa Steel and TN Bank claimed US$350 000 and US$15 000 respectively.