Zimbabwe: Foreign Investors Eye Hwange Colliery

Photo: The Herald
Hwange Colliery.

International investors have expressed interest in snapping up equity and providing working capital to Hwange Colliery Company Ltd (HCCL), a company official has said.

HCCL, according to reconstruction board chairman Bekithemba Moyo, requires about US$50 million to get it out of the current financial position.

The money will be allocated towards critical areas in the mining concern's production chain.

Moyo said: "We met a number of possible financiers (for HCCL) on the side lines of the recently held Afreximbank meetings.

"Whilst there is nothing concrete (at the moment), it is interesting to note that investors are willing to listen to our story despite the well documented challenges that the business has gone through."

He added that financiers were interested in establishing how they would get a return on their investments should the planned business model succeed.

"The major challenge we have is to come up with bankruptcy remote structures to ensure that even in the unlikely event that the HCCL is not able to trade out of its problems, the new funders will not lose money. We are therefore firmly focused on coming up with deals that will ensure that we raise funding at an affordable cost and at the lowest possible risk to the funders," Moyo said.

HCCL was currently generating paltry top line earnings and requires to get back to full production. Moyo, however, says there would be no free lunch for HCCL.

"The investments or loans, as some would prefer, are not coming for free," Moyo said. "There is a lot of justification that we would need to do to assure the would-be investors that the money will indeed go into the areas that we have cited as needing money. It is not as easy as one would think but we are confident that going forward, some of these institutions will come on board and help up revive this company. It might not be tomorrow as you know these processes take time, but we are sure that soon, we will be tying the loose ends to these agreements."

Hopes are high that once the funders come on board with the required funding, HCCL will come out of the woods, a move that will bring joy to dozens of creditors who are eager to recover their dues from the company.

Workers, who for years have endured payless months in some instances, are also banking on some of the board's initiatives to raise money which in turn would result in them getting their long awaited pay cheques.

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