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Creditors, RioZim clash

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A consortium of banks owed by RioZim made an application for the mining firm to be placed under provisional judicial management. But, RioZim shareholders have, however, vowed to fight the application.

In a cautionary statement yesterday, RioZim said it had since accepted an offer with written support of major shareholders that would provide sufficient funds to solve the companys indebtedness and provide a way forward.

It has, however, come to the boards attention that a consortium of banks has made an application for a provisional judicial management order against the company, said RioZim.

This application will be opposed by both the company and its major shareholders because in their view the offer will be far more beneficial for shareholders and creditors than judicial management.

RioZim shareholders last year refused a $29 million share swap deal that the company had secured.
Trust Banking Corporation advanced $3,4 million to RioZim. Most of the loans were due the first half of 2011. Tetrad also advanced loans amounting to $4,8 million.

Kingdom Bank was exposed to the tune of $7,5 million to RioZim as of May 2011. ZB Bank was also exposed to the tune of $5, 9 million. The ZB loan facilities were due early May 2011 making the bank roll over the facility. Premier Banking Corporation was exposed to the tune of $2,4 million. BancABC was exposed to the tune of $3 million.

RioZim failed to settle the loans in April forcing management to roll over the facility. African Banking Corporation Botswana was also exposed to the tune of $5 million. Interfin Bank was owed $1,5 million by the company.

Other financial institutions that were owed funds by the mining group are IDBZ $2,3 million, Metropolitan Bank $1,3 million, Imara Corporate Finance $1,5 million, but their loans are now due.

African Export and Import Bank was owed some $8 million which has been due since December last year. Renaissance Merchant Bank was also exposed to the tune of $2,9 million.

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