eBusiness Weekly
HARARE – Creditors owed millions of dollars by struggling coal miner, Hwange Colliery Company Limited (Hwange) said on Saturday they are against the government’s move to place the firm under reconstruction.
Hwange was already under a High Court sanctioned revival programme, technically referred to as a “scheme of arrangement” before government, through the Ministry of Justice, took the decision to put the company under administration at the end of October.
The move firmly placed government in total control of the Zimbabwe Stock Exchange listed firm in which it is a major shareholder.
Mines and Mining Development Minister, Winston Chitando, under whose ambit the company falls, defended the move saying it was meant to stop the company from sinking deeper into insolvency which would make its revival impossible.
Following the government move, which was done in terms of the Reconstruction of State Indebted and Insolvent Entities Act, Hwange was placed under the management of an administrator, Bekitemba Moyo of DBF Capital.
The Ministry of Justice has since approached the High Court to confirm the legality of its decision.
But a representative of the creditors, said the government move was not called for, and has filed opposition papers at the High Court “On the strength of the original court order sanctioning the scheme and in order to protect creditor’s interests, and in my capacity as the trustee of the scheme, I have filed an opposition to the minister’s application,” said Andrew Lawson, who is the chairperson of the scheme of arrangement.
He said he would soon convene a creditors meeting to map a way forward.
In its justification for placing the coal miner under administration, the government cited three reasons namely that the company owes government, was insolvent and that there was a possibility of it returning to profitability. – New Ziana
