ASBESTOS fibre cement products manufacturer Turnall Holdings will be debt free by the end of the 2019 financial year after it managed to offload its US$7,2 million loan to the Zimbabwe Asset Management Company (Zamco) in March this year.
By Melody Chikono
The company says it will retire the rest of the debts from trading cashflows and has already commenced making payments to Zamco in line with agreed conditions.
Turnall restructured its short-term debt to medium-term through Zamco and this is expected to reduce the firm’s cost of borrowings and remove the bulk of the bank penalty and punitive interest cost which totalled US$500 000 in 2017.
The debt is repayable over six years at an interest rate of 10% per annum.
Company FD Samson Mavende told businessdigest on Wednesday that the company was now in a position to retire its debt.
“The company’s bank debts were taken over by Zamco.We signed an agreement with Zamco in March and it has taken over our debt. We have already commenced on our payments with the initial payment being in March as per our agreement.
The rest of the debts (mainly trade creditors) will be retired from trading cashflows. The company has made payment plans with key creditors. We are confident that the company’s net liability position will be corrected by the end of 2019. We have already made strides towards that goal,” he said.
This year, Turnall also successfully concluded payment arrangements with key creditors it owed US$29 million in a crucial deal that will go a long way in restructuring the company’s capital structure.
Mavende said the company had managed to restructure debts without simultaneous capital injection. Turnall’s other funding initiatives were largely dependent on the successful completion of the balance sheet restructuring process.
“The funding initiatives were tied with the scheme of arrangement to give support to the scheme and gain confidence of the creditors that the scheme would succeed. However, we have managed to restructure the company’s debts without simultaneous capital injection,” he said.
Mavende refuted reports that Turnall Holdings has approached the Reserve Bank of Zimbabwe seeking a US$10 million bailout package it requires to retire toxic debt.
“We did not apply for any funding from the Reserve Bank,”’ he said.
Its sales volumes for the five months to May 2018, at 16 578 tonnes, is 71% above the previous year.