LOCAL cement producer, PPC Zimbabwe, says the disposal of houses at its Colleen Bawn and Bulawayo factories will be completed during the 2019 financial year, as government was still processing sectional title deeds.
BY MTHANDAZO NYONI
In September 2015, the PPC Zimbabwe board approved the disposal of houses at its Colleen Bawn and Bulawayo factories, which was anticipated to be finalised in 12 months.
However, more than two years down the line the government was still processing the sectional title deeds.
“The disposal has been delayed due to the government processing of the sectional title deeds and is now anticipated to be completed during the 2019 financial year. No impairment loss was recognised on the initial reclassification as management concluded that the fair value (estimated based on market prices of similar properties) less costs to sell was higher than the current carrying amount,” the company said.
On the government’s treasury bills, the company said the initial face value of the treasury bills was $706 831 (R8 million), repayable in three equal annual installments from June 2017 to June 2019.
“In the current year, a first instalment of $188 613 (R2 million) was received. Due to current liquidity constraints in Zimbabwe and uncertainty around receipt of the remaining instalments, the remaining value is still recognised as non-current,” it said.
PPC Zimbabwe said in the year ended 2018, it has cash and cash equivalents, net of restricted cash, of R466 million (2017: R237 million).
“The funds are freely available for use in Zimbabwe, but due to the current economic environment, the transfer of funds outside of the country is limited,” it said.
In 2016, the Reserve Bank of Zimbabwe through the exchange control operational guide number 8 introduced a foreign payments priority list that has to be followed when making foreign payments.
Any foreign payment that is made is ranked based on the central bank prioritisation criteria and paid subject to the bank having adequate funds with its foreign correspondent banks.
“This has resulted in the delayed processing of payments of foreign telegraphic transfers. The delayed payments have resulted in an increase in the cash and cash equivalents balance and the foreign creditor balances compared to the prior year,” PPC said.