Listed agro-industrial concern Border Timbers Limited (BTL) is negotiating with the Zimbabwe Asset Management Corporation (Zamco) to absorb US$6 million owed to banks by the group as the company seeks to clean up its balance sheet.
Although BTL’s provisional judicial manager Peter Bailey would not be drawn to divulge the identity of the organisation that is going to absorb the debt on the sidelines of the company’s annual general meeting last week, businessdigest is reliably informed that Zamco — a special purpose vehicle created by the Reserve Bank of Zimbabwe (RBZ) in August 2014 to absorb non-performing loans in the banking sector — will be taking over the debt.
“What we arranging is that it (debt) will be taken over by another organisation which will give a much longer-term payment period of about 8-10 years. Owed banks will be paid back by the organisation that is taking over the debt. At the moment, I should not talk more about it until the deal is sealed .We are now at advanced stage of negotiations. We got agreements drafted but could signed in few months to come,” Bailey said.
BTL owes FBC Bank, NMBZ and Ecobank a combined US$6million. In a trading update for the four months to October 31, the firm said despite economic challenges demand for poles and lumber remain strong both locally and in the region.
BTL’s financial director Wellington Mutizwa said business for the company has been on a upward trajectory, particularly in the last three months of the last financial year right through to the current financial year.
He said improved log supply has buoyed production volume by 45% compared to last year.
Turnover was 7% up in the same period last year. However, depreciating foreign exchange militated against growth in turnover. The South African unit has been weakening against the United States dollar. South Africa is Zimbabwe’s major trading partner. “Earnings before tax is positive , compared to loss for same period last year. The company has posted profits on monthly basis since July 2015,” Mutizwa said.
The firm applied to be placed under provisional judicial management on January 5 this year.
BTL’s provisional judicial management was supposed to end on April 29 2015. On January 13 2016 judges will rule whether the company should remain under curatorship. After the ruling, a creditors meeting will be held end of January.
The firm is a subsidiary of Rift Valley Corporation which operates forestry and sawmilling divisions, with the former having a total of four estates which include Tilbury, Charter in Chimanimani area and Imbeza and Sheba located in Penhalonga north of Mutare.
The company was incorporated in 1979 through the consolidation of Border eastern Forest Estates, Renfee Timbers and Forestry management services ltd has the size of estates to about 48 000 hectares with 23 000 hectares currently planted.