Border Timbers Ltd (BTL), whose US$6 million debt was absorbed by Zimbabwe Asset Management Corporation (Zamco), is now operating profitably. As a result the company is likely come out of judicial management soon should creditors give the greenlight next month, businessdigest can reveal.
By Fidelity Mhlanga
Judicial manager Peter Bailey this week told businessdigest that BTL is awaiting creditors nod next month to exit judicial management. The company was placed under judicial management on January 5 last year.
BTL’s provisional judicial management, which was initially supposed to end on April 29 2015, was extended to January 13 2016 before judges extended the process further with the creditors meeting set for end of April, set to be the defining moment.
“The company may come out of judiciary management, as soon as we get the approval of creditors, which could be end of next month when we are convening the creditors meeting. The company is now profitable,” he said.
The company’s financial accounts are due to be published soon.
BTL owes FBC Bank, NMBZ and Ecobank a combined US$6 million.
Bailey said a deal with Zamco was sealed after the asset management company agreed to offer a longer-term payment period of about 8 years.
Owed banks will be paid back by the organisation that is assuming the debt.
“We arranged it because the terms are better than what the banks were offering,” he said.
Zamco is a special purpose vehicle created by the Reserve Bank of Zimbabwe (RBZ) in August 2014 to absorb non-performing loans in the banking sector.
Bailey, who last year said major shareholders had expressed willingness to court new investors to raise capital to meet the business requirements, this week said the firm had no urgent need for fresh capital injection.
Bailey said the company has found lucrative markets for its products which now act as leverage to its business success.
In a trading update for the four months to October 31, the firm said despite economic challenges, demand for poles and lumber remain strong locally and in the region.
During the period, the firm’s earnings before tax were positive compared to a loss in the same period in 2014.
The company has posted profits on monthly basis since July 2015.
BTL 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.