HWANGE — The Hwange Colliery Company Limited (HCC) says it hopes to settle outstanding salaries in the third quarter to September if efforts to recapitalise bear fruit.
HCC is technically insolvent and owes workers $19 million in unpaid wages for 11 months. In October last year, it sent 1 000 employees — a third of its workforce — on unpaid leave after the overdue wage bill climbed to $14 million.
Managing director Thomas Makore told the firm’s middle managers and workers’ representatives at the weekend that his main priority was to come up with a salary payment plan in the third quarter.
“All this hinges on securing working capital that is planned to procure new spares and equipment so that production volumes are increased significantly,” he said.
“This will enable us to come up with a sustainable payment plan as we seek to restore the company’s viability.”
After the company’s annual general meeting last month, Makore said HCC was seeking $33 million to recapitalise the business and double output to 300 000 tonnes per month.
The recapitalisation programme will include a loan from PTA Bank, vendor financing of equipment from BML in India worth $15 million and BelAZ of Belarus worth $18,3 million. The equipment is expected in the country by August.
It also proposed to convert a $65 million debt in unpaid statutory obligations into government equity. The debt is in relation to tax payments to the Zimbabwe Revenue Authority and pension contributions to the National Social Security Authority.
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