COMMERCIAL banks owed $8,8 million by the country’s ailing sole packaging glass manufacturer, Zimbabwe Glass Industries (Zimglass), have given the company six months to find a suitable investor or face liquidation, the judicial manager told The Source yesterday.
Zimglass voluntarily applied for judicial management in June this year citing lack of capital, debt and mismanagement. Its liabilities worth $32 million far exceed its $20,6 million assets.
The secured creditors, AfrAsia Zimbabwe, ZB Bank, Agribank and FBC Bank, had tentatively agreed to swap debt for land, pending a meeting where they would vote to either liquidate or save the company since the shareholder was unable to inject fresh capital into the insolvent firm.
However, Judicial manager, Winsley Militala of Petwin Executor and Trust, said he told creditors that the company’s assets were overvalued and would not fetch much under a forced sale, resulting in creditors voting in favour of saving the company.
“Zimglass got another lease of life after the creditors agreed to put it under final judicial management to enable me to find an investor,” he said.
He said two of the four banks representatives who attended the meeting and whose claims were approved gave him up to March next year to revive the company.
“We are currently in talks with a foreign investor who wants to invest in Zimglass and he has requested for a number of things before he can make a decision and we are working towards availing them,” Militala said, declining to disclose further details.
He said by end of the year he would have something tangible for creditors, adding that the discussions were “very promising”.
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Zimglass’ $32 million 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, used to rebuild the plant.
The company manufactures glass packaging material for alcoholic beverages, sparkling beverages, food, liquor 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.
It was established in 1963 as a subsidiary of Consol Glass and became an Industrial Development Corporation of Zimbabwe subsidiary in 1984. — The Source
