22 March 2018
Govt threatens to block doctors’ salaries
Michael Owen launches own cryptocurrency
44 African countries sign free trade pact
Mnangagwa pardons 3,000 prisoners
Rwanda: Mnangagwa commends civil society
Chivayo: Mangoma to appear before MPs
Parly: Ex-ZMDC boss grilled over $15bln
Rape accused teacher commits suicide
Indigenisation law change cheers miner
Mnangagwa: Africa can do much better
Zim Achievers SA to honour Mtukudzi
Trey Songz up for punching woman
Zambia beat Zimbabwe Warriors on penalties
Alonso facing prison over tax fraud
Mugabe spoke for the marginalised, but
Whither ED, how tactful art thou?
ZimDiaspora: Bum cleaners, runaway fathers?
Autism: Awareness and interventions
RioZim gets shareholder approval for Zamco deal
21/01/2016 00:00:00
by The Source
RioZim buys Dalny Mine from Falgold
Rio sells Murowa, exits Zim after 60 yrs
RioZim seeks US$45m to address debt

HARARE, January 21 (The Source) –RioZim Limited shareholders on Thursday approved a proposal for the state’s bad loan special purpose vehicle to acquire some of its short-term debt of nearly $34 million and lower finance costs by half, creating fiscal space for the struggling resources group.

In the three years to June last year, RioZim paid $36,3 million in interest charges but only reduced its core debt from $58 million to $43,1 million. Interest rates charges on the debt have averaged over 21 percent but are set to come down to nine percent following the transaction with the Zimbabwe Asset Management Corporation (Zamco), a special purpose vehicle set up by government to purchase non-performing loans from banks and clean their balance sheets.

RioZim’s shareholders, who met at an extraordinary meeting in the capital on Thursday, allowed RioZim to convert 10 million of its unissued authorised ordinary shares into cumulative redeemable preference shares of $0,01 each.

“Shareholders also allowed us to convert 10 million of our unissued authorised ordinary shares into 10 million unissued authorised cumulative redeemable preference shares of US$0,01 (each to be issued to ZAMCO at a premium of $3,36721 per share on terms and conditions contained in the memorandum of agreement,” said RioZim chief executive Noah Matimba.

Zamco will acquire RioZim’s non-performing loans in exchange for preference shares for a five-year period.

The shares would have a coupon rate of nine percent per annum payable bi-annually.

In turn, ZAMCO will have one seat on RioZim’s board of directors as long as the preference shares remain unredeemed. However, the member will not have voting rights.

Matimba told journalists on the sidelines of the EGM that the latest development would see the resources company focusing on growth.

“We are pleased that our shareholders have supported us and our strategy going forward is to survive by reducing costs and operating efficiently,” he said adding that the diversified miner was also looking forward to “a much better bottom-line”.

Chief financial officer Bheki Nkomo added that the restructuring of the debt would complement the company’s turnaround strategy and help secure its future.

“The transaction will result in the company’s liquidity ratios and gearing improving significantly as the short-term debt had weakened our balance sheet,” he said.


For the six months to June 30, 2015, RioZim reported a net loss of $7 million, compared to a $7,5 million loss recorded over the same period in the  prior year.

The group’s revenue declined to $23,1 million from $39,4 million recorded over the same period in the prior year.

Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it






Face Book



comments powered by Disqus
RSS NewsTicker