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Turnall speaks on restructuring


Turnall acting finance director, Samson Mavende has said the move to restructure the company’s balance sheet was done to save the company from going under judicial management.



Mavende’s remark comes after the company is reportedly restructuring its balance sheet by engaging its creditors for a possible debt-to-equity swap to ward off creditors jostling for its assets.

“This is why we have to be proactive and go for this [balance sheet restructuring] no one talked about it (judicial management route), but were now under a lot of pressure people saying we are going to attach this because we couldn’t pay their debts. So the only way was to come up with this structure otherwise we would have gone that way, (judicial management),” he said.

In terms of Section 300 of the Zimbabwean Companies Act (Chapter 24:03), the court may grant a judicial management order when by reason of mismanagement or for any other cause a company is unable to meet its obligations, but it has not become or is prevented from becoming a successful concern.

Though Mavende could not divulge details of the restructuring exercise, NewsDay has it on good authority that the company wrote to its creditors proposing that they receive shares in full and final settlement of the outstanding balance with the number of shares basing on the conversion price determined by the intrinsic value of the company, insiders have said.

Turnall also gave creditors an option to either receive and hold shares or alternatively match the receipt of shares with the immediate disposal of the same shares to a third party.

The manufacturing firm’s current liabilities stand at $18 million as of December 2016 against total assets of $35 million in 2015.

Furthermore, the company registered a 41% turnover decline to $16,9 million during the period from $29 million in 2015 attributed to subdue demand, uncompetitive pricing and liquidity constraints.

Sales volumes were 41% down to 36 791 tonnes in 2016 from 62 631 tonnes in the prior year.

Mavende said the balance sheet restructuring exercise, to be completed by June, would give a lifeline to the company.

“Our original timeline is end of May. So, looking at what is on the ground it may take some time but I think by half year we should have finished the balance sheet restructuring so that the second half we should be trading after resolving these challenges,” he said.

Mavende said the company has engaged the Zimbabwe Revenue Authority (Zimra) to pay the $16 million tax obligations in 8 years.

“Zimra has allowed us to pay the debt over 8 years. We owe them $16 million. At the moment we are talking to some banks and I think the banks are of the view that we can resolve it without going to Zamco (Zimbabwe Asset Management Company),” he said.

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