BETA Holdings pursues new capital raising options

BETA Holdings, a Zimbabwean brick maker under corporate rescue, is actively exploring alternative strategies to resume production, including order financing and toll manufacturing for contractors.

This comes as the company faces protracted delays and outright failures in finalising investment agreements with several interested parties, sources familiar with the developments said.

Having entered voluntary corporate rescue last December due to financial and operational challenges, BETA had initially anticipated resuming production by the end of last month.

However, efforts to secure the proposed investment deals for the company’s revival proved unsuccessful.

Corporate rescue practitioner, Mr Tinashe Rwodzi recently informed the creditors committee that four distinct investors had expressed interest in injecting capital into the company, sources said.

Mr Rwodzi could not be reached for a comment by the time of publishing.

The investors included a Dubai and Zurich-based entity, two local investors (one being a local investment fund), and a Chinese company already involved in brick manufacturing in Zimbabwe.

However, despite initial promising discussions, none of these negotiations have yet culminated in a binding agreement.

“We are now exploring other complementary initiatives, which include order financing production or toll manufacturing, at least to restart operations,” said one source, who declined to be named because he is not allowed to talk to the press.

The source said the “strategic pivot is a direct response to the stalled investment talks, particularly with the lead investor,” the Dubai and Zurich-based entity adding that “the investor had made repeated unfulfilled promises to come to Zimbabwe as committed.”

Mr Rwodzi is reported to have also provided the status of negotiations with other potential investors.

A local investor’s offer of US$7 million was deemed inadequate, and while they reconsidered, no revised offer has been received.

A local investment fund has shown strong interest and has been supplied with due diligence information, with an update expected this week.

The Chinese investor, already in brickmaking locally, was reported to be primarily interested in BETA’s Mt Hampden clay resource, and proposes bringing in a new machine to manage operations and share profits.”

However, concerns about the impact on BETA’s existing plant and a potential year-long production halt during installation have been raised and “the investor is rethinking its offer.”

In a bid to generate immediate working capital, Mr Rwodzi, with the help of the creditors committee, is exploring burning approximately three million unburnt bricks at its Mt Hampden yard.

The move, though it is still in its infancy, aims to prevent further deterioration of the brick stock, which has suffered significant rain damage.

Rough estimates suggest about 50 percent of these bricks might be recoverable, but working capital is needed for coal, labour, diesel, and power.

BETA owes about USS$8,7 million to clients for pre-paid orders of bricks, roofing tiles, and aggregates.

FBC Bank is the largest single creditor, with a total outstanding amount of approximately US$10 million.

Preferential creditors, primarily employees, are owed approximately US$1,2 million and ZiG1,23 million.

Among statutory bodies, the Zimbabwe Revenue Authority (Zimra) is owed the largest sum, at US$1,26 million and ZiG279 537.

The National Social Security Authority (Nssa) and the Zimbabwe Manpower Development Fund (Zimdef) have similar payment terms for their respective US dollar debts, albeit smaller overall amounts.

Concurrent creditors, including trade and other suppliers, are owed US$4,4 million and ZiG453 972.
Power utility Zesa was scheduled to receive full payment of its outstanding balance by the end of May 2025.-herald