THE Zimbabwe Stock Exchange (ZSE) says it will engage suspended Hwange Colliery Company Limited (HCCL) in an effort to set a new course for the troubled miner.
BY NKULULEKO SIBANDA
HCCL was suspended from the ZSE last November after it was placed under reconstruction by the government in terms of section 4 of the Reconstruction of State Indebted Insolvent Companies Act, although shareholders are contesting the legality of the move, given that the company is listed.
The coal miner is also listed on the London and Johannesburg stock exchanges.
“It is known that the suspension of the HCCL was a result of action that was taken by government to place the company under administration unilaterally without consulting other shareholders. We have since reached out to the HCCL, via the administrator, and requested an engagement with them,” ZSE chief executive Martin Matanda told NewsDay.
DBF Capital co-founder Bekithemba Moyo was appointed the chief administrator and is assisted by commercial lawyer Mutsa Remba and Great Dyke Investments chief operating officer Munashe Shava.
He revealed that the local bourse would seek clarity on a number of issues concerning the current state of affairs at the coal miner.
“Our engagement with Hwange Colliery will solely be to get to understand, from the perspective of the administrator, a number of issues around the company, which is part of our mandate as the ZSE. We suspended the company as per regulations and we are now following up to go deeper into how this situation obtained and what should be done going forward,” Matanda added.
The ZSE, Matanda said, was keen to understand how long the HCCL would be run by the administration team.
This, he said, would also help the bourse understand when the company would revert to being run by the board and management.
“The term of the administrator and when it will end is crucial for us because we would be able to determine whether there is a chance the company would return to normalcy and whether it (HCCL) can be re-admitted back to the exchange,” he said.
Government is the main shareholder with a 42% stake in the company, while British tycoon Nicholas van Hoogstraten controls about 22% through his investment vehicles Messina Investments and Hamilton and Hamilton Trustees.
Other major shareholders in Hwange are the State-run pension fund, the National Social Security Authority (6,23%), and Mittal Steel of South Africa (9,68%).
The company, saddled with debts in excess of US$350 million and misappropriation of US$6,4 million, was beginning to show signs of recovery after creditors agreed to a scheme of arrangement in 2017, but it slipped back into distress as a messy fallout between management and the board reached catastrophic levels, prompting the government to place it under reconstruction.