HARARE — The country’s sole packaging glass manufacturer, Zimbabwe Glass Industries (Zimglass) has offered its major creditors land to clear an $8,8 million debt, according to a report seen by The Source on Friday.
The company, which has been insolvent since 2010, voluntarily applied for judicial management in June citing lack of capital, debt overhang and mismanagement.
Its assets at $20,6 million far exceed its liabilities worth $32 million.
A report by the provisional judicial manager, Winsley Militala of Petwin Executor and Trust, shows he proposed to restructure the company’s debt by replacing expensive short-term debt with long-term paper and swopping debt for land.
The banks owed money are Kingdom Bank (now AfrAsia Zimbabwe), ZB Bank, Agribank and FBC Bank.
“The shareholders, being under-funded in their own right, are not in a position to inject new money into the company.
They are, however, engaged in negotiations with the banks for a land-for-debt swop arrangement that should see the banks being released from the funding matrix,” Militala said in the report to creditors.
Zimglass’ debt includes $5,5 million borrowed for capital expenditure to revive operations after its shutdown in 2010 and a further $8,8 million in short-term loans from local banks which was used to rebuild the plant and refurbishments.
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The provisional judicial manager recommended that the company be placed under final judicial management.
“I am of the opinion that real value to all stakeholders is still achievable and as such, I recommend that the company be placed in final judicial management,” he said.
Militala proposed to engage a glass industry specialist to come up with a viable business plan to enhance operational efficiencies and to attract investors.
He also proposed to restructure the balance sheet through a scheme of arrangement with employees, trade creditors, loan creditors and shareholders.
Zimglass has since been sued by some of its creditors, including Fawcett Securities, Hunyani Paper and Packaging as well as City Plastic Industries.
The company manufactures glass packaging material for alcoholic beverages, sparkling beverages, food, liquor/wines and pharmaceutical segments.
Its major domestic customers include Delta Beverages, African Distillers, Mutare Bottling Company, Straitia Investments, Olivine Industries, Datlabs and E Snell and Company.
Zimglass was established in 1963 as a subsidiary of Consol Glass and became an Industrial Development Corporation of Zimbabwe subsidiary in 1984.
It owns and operates a glass manufacturing plant and a silica sands mining and processing company in Gweru. — The Source
