Turnall Holdings says it has completed negotiations with all its major creditors, but is still struggling to agree with banks on the restructuring of debt although negotiations are now at an advanced stage.
By Melody Chikono
Turnall owes creditors US$29 million in both current and non-current liabilities debts. Management said the group’s capital structure has prevented the tile, asbestos and pipe manufacturing entity to look for working capital.
The banks — FBC, BancABC and CABS — have been failing to reach a consensus with Turnall, which it owes a combined US$7,5 million. Acting finance director Samson Mavende told businessdigest that the group expects to complete the whole balance sheet restructuring in Q1 2018.
“We have agreed on the restructuring with all our major creditors. The only outstanding thing is the restructuring of bank debt. We are now at an advanced stage on the restructuring of bank loans. We plan to complete the balance sheet restructuring in the first quarter,” he said.
Mavende said the group was confident that it would complete the bank loans restructuring soon, while a total turnaround of the group was expected in the coming year.
The turnaround will be driven by a new strategic plan that the group has formulated that will see its turnover increasing in the next few years, management said.
“We are looking forward to increasing our turnover steadily over the next few years with an emphasis on increasing high margin products. The company will also focus on improving the production of concrete products whose raw materials are available locally and are not affected by foreign currency shortages,” he said.
Turnalls’ turnover in the half year to June 30 2017 declined 12% to US$47,7 million from US$8,7 million in the same period prior year .
The completion of the restructuring exercise will see the group having in excess of US$4 million which it is seeking as working capital but the losses and negative cash flows have been the major constraints in sourcing working capital.
“We are sourcing for working capital as part of the balance sheet restructuring process. We also have certain funding initiatives that are dependent on the successful completion of the balance sheet restructuring process. The company’s improved performance in the second half and the projections for 2018 show that the company has a viable business model that can deliver profitability if it is adequately funded,” he said.