HomeBusinessHCCL closes recapitalisation deals

HCCL closes recapitalisation deals

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Hwange Colliery Company Limited (HCCL) has successfully closed two capitalisation transactions worth $31,2 million with the company expected to take delivery of equipment by April as it moves towards the projected 450 000 tonnes monthly output.

BY NDAMU SANDU

The two transactions, which are vendor-financed, include the PTA funded $18,2 million BELAZ facility and the India Exim Bank’s $13,03 million BEML facility.

HCCL will get 10 dump trucks, five front-end loaders and two wheel dozers from BELAZ. BEML will supply HCCL with two excavators, two water bowsers, three front-end loaders, three bulldozers, three drill rigs, a motor grader and one tyre handler.

The new equipment, together with the work of a contractor — Mota Engil — would see output totalling a minimum of 450 000 tonnes per month by the second half of the year, the company said in a progress report shared by executive management.

Mota Engil was engaged last year to produce 200 000 tonnes of coal monthly. It began open cast mining in August.

Mota Engil’s total output has reached 996 000 tonnes.

“The contribution of the contractor has enabled HCCL to work on stabilising its own production while bridging the gap between the purchase of new equipment and the commissioning of this equipment in May,” HCCL said.

“The overall combined production target is to achieve a minimum of 450 000 tonnes monthly by H2 [second half], split between HCCL’s own production and the contractor.”

HCCL said balance sheet restructuring would commence after management and board secure necessary support from major shareholders to launch a rights offer to retire a significant portion of the company’s debt. This will ultimately result in the company generating positive cash flow and reducing its interest burden.

“The excess cash that is expected to be generated by the business post the rights offer will be applied towards the retiring backlog in statutory obligations and payments for salary backlogs. The rights offer process is expected to be launched soon upon receipt of all relevant regulatory approvals,” HCCL said.

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