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Hwange losses widen, firm faces up to $40mln in lawsuits
30/09/2015 00:00:00
by The Source I Reuters
 
We are diligently sourcing working capital ... Farai Mutamangira
 
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HWANGE Colliery Company said Wednesday its first-half coal and coke sales fell 10 percent after a slide in production, widening its loss, but aimed to sell more in regional markets during the remainder of the year.

Hwange, in which the government is the biggest shareholder with 37 percent shares, is the nation's second largest coal producer and supplies coke to the national electricity company.

The company sold 685,759 tonnes of coal and coke between January and June, down from 764,813 tonnes during the same period in 2014. This resulted in a decline in revenue to $35.4 million from $40 million previously.

After tax loss nearly doubled to $15.6 million compared with $7.9 million in 2014.

“The burden of servicing legacy debts continued to strain the company’s cash flows and this presented working capital challenges,” said chairman Farai Mutamangira in a statement Wednesday.

“The board and management are diligently sourcing working capital from local money market to inject into operations.”

Mutamangira he saw sales growth opportunities in regional markets, especially South Africa, Democratic Republic of Congo and Zambia.

In March, Hwange signed an agreement to sell coke and coke products to global miner Glencore on a six-month trial period.

Managing director Thomas Makore would not comment further on Wednesday.

Hwange's plan for a rights issue and a private placement to convert its $80 million debt to government into equity would be discussed by shareholders soon, Mutamangira said.

The company had litigation brought against it amounting to $40,7 million.

Cases worth $20,1 million have been awarded against the company while the rest are still pending.



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