THE National Railways of Zimbabwe (NRZ), saddled with a US$200 million debt, is struggling to clean its balance sheet to attract investors to revive the ailing company once regarded as the wheels of the economy.
By Hazel Ndebele
NRZ owes its creditors US$144 million apart from the US$68 million in outstanding salaries.
The parastatal is seeking a turnaround strategic partner, but a mismatch in its balance sheet has largely kept investors at bay.
In July last year, the NRZ submitted a paper to government proposing that its debts be absorbed by the state, as part of efforts to clean up its unattractive balance sheet.
The derelict company is desperate for investors and needs US$650 million for recapitalisation in order to get back on its feet.
In an interview with this paper on Wednesday, NRZ board chair Larry Mavhima said the company is looking at “all possible ways” to clean its balance sheet as it needs to make the parastatal attractive to investors and financiers.
“In 2017 we will continue with the foundation we laid last year which is to be able to identify funding partners. In February we will float a request for proposals where all those interested in the running of NRZ whether they are the operators, financiers or investors should come through,” he said.
“At the moment we are dealing with the ongoing exercise of cleaning our balance sheet, there are many processes involved to make NRZ attractive to investors.”
Mavhima said NRZ’s objective for this year is to close down the process of identifying funding partners.
“We are fully aware that the parastatal still needs to deal with the issue of manpower to attract investors. We would need a lot of money for the retrenchment exercise, however at the moment the company is waiting for the Auditor-General’s forensic report in order to carry out the exercise and the ministry (of Transport) must approve of the plan,” he said.
In June last year, the parastatal proposed to retrench between 1 000 and 1 400 workers.
Mavhima said an audit was needed to help the company determine the optimum number of workers it needs to retrench while also identifying the areas which need restructuring.
He said the NRZ is going to acquire at least 100 more wagons by the first quarter of 2017 in addition to the 31 wagons it acquired last year.