LISTED agro-industrial concern Border Timbers Limited is looking for US$10 million in fresh capital to inject into its struggling business, businessdigest has learnt.
By Fidelity Mhlanga
This comes after the company lost US$26 million worth of timber when a fire gutted its plantation.
Border Timbers suffered a US$24,3 million loss in the year-ended June 2016 compared to a US$4,3 million loss the previous year.
The firm is courting offshore investors.
“We have put out fillers to see where we can get the money. Major shareholders are looking and we are also looking outside the country because locally there is no cash,” the company’s judicial manager Peter Bailey said this week.
“The amount the company may need changes from time to time. Now we need less money because we are generating cash.
Maybe around US$9 million to US$10 million.”
The company was placed under judicial management on January 5 last year.
Border Timbers’ provisional judicial management, which was initially supposed to end on April 29 2015, was extended after the company failed to turnaround.
However, on May 2, Bailey was appointed by the High Court as the final judicial manager.
In a statement accompanying half-year results, Bailey said there were concerted efforts to put in place a scheme of arrangement which, if approved by all classes of creditors, would enable the company to be taken out of final judicial management.
According to Bailey, discussions with major lenders and the shareholders are ongoing on the finalisation of the scheme of arrangement.
The scheme of arrangement is coming at a time concerted efforts for product and market diversification meant to expand the company’s revenue base are being expedited.
Demand for the firm’s products remains strong in the region and beyond with new markets being explored in West and Central Africa.
The company’s US$6 million debt to FBC Bank, NMBZ and Ecobank was in November 2015 absorbed by the Zimbabwe Asset Management Corporation (Zamco), a special purpose vehicle created by the Reserve Bank of Zimbabwe in August 2014 to absorb non-performing loans in the banking sector.
Border Timbers 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, incorporated in 1979 through the consolidation of Border Eastern Forest Estates, Renfee Timbers and Forestry Management Services Ltd, has 48 000-hectare estates with 23 000 hectares currently planted.