BETA sets May restart for brick deliveries
BETA Holdings, currently under corporate rescue, intends to settle US$8.7 million owed to clients for pre-paid bricks, roofing tiles and aggregates through product deliveries over an 18-month period, commencing in May when operations are expected to restart.
This information is detailed in the latest report concerning the company’s outstanding debts.
The amounts owed are as of December 31, 2024, and were presented at a meeting of creditors last week.
BETA’s prepayment system had allowed customers to make smaller, more flexible payments over time until their full order was complete, offering a preferred alternative to standard full payments and a six-week delivery wait.
This arrangement enabled clients to make incremental contributions towards their eventual collection of bricks, roofing tiles and aggregates.
However, difficulties arose when the company began failing to fulfil orders, even after the standard six-week waiting period.
This breakdown in service delivery marked the beginning of their troubles.
Despite mounting financial difficulties that were becoming increasingly apparent, BETA continued to collect payments.
Adding to the allure and attracting further customers was a calculated public relations campaign featuring a series of newspaper articles promoting the commissioning of a second plant in September 2023.
This new facility was claimed to have double the production capacity of the existing one, a development that, had it come to fruition, would have significantly eased the growing backlog of unfulfilled orders.
“They kept running those glossy articles about the new plant, promising to raise the output and an end to the delays,” said one customer, who had been planning to start building his house in October 2023.
“It sounded so convincing, like they were finally turning things around. I thought putting in a bit more would finally get my bricks delivered faster once that new line was up and running. We were all so hopeful.”
For clients who have since found alternative suppliers, receiving the product now may be seen as an unwelcome burden.
Other customers, having already purchased the materials elsewhere, had hoped for a refund instead.
“How was I supposed to protect my house with the trusses exposed because my roofing tiles never came,” the frustrated customer said.
“What pains me most is that I decided to start the roofing after they assured me I would receive my tiles in four days. I went ahead with the timber work, and now it has been two years of waiting.”
The report also details the debts and payment plan for other creditors. FBC Bank is the largest single creditor, with a total outstanding amount of approximately US$10 million, representing nearly 39 percent of the US$25.7 million owed.
FBC, the sole secured creditor, is scheduled to receive a full repayment of US$4 million by the end of May 2025. The remaining debt will be settled over a four-year period, commencing after a three-month moratorium, the report states.
Preferential creditors, primarily the employees, are owed approximately US$1.2 million and ZiG1.23 million.
The payment plan prioritises a 25 percent settlement of the ZiG portion by the end of May, with the remainder to be cleared over three months. The US dollar component will be repaid over 24 months.
Among statutory bodies, the Zimbabwe Revenue Authority is owed the largest sum at US$1.26 million and ZiG279,537. The ZiG debt is scheduled for repayment within two months, while 50 percent of the US dollar portion will be paid by the end of May 2025, with the balance settled over four months.
The National Social Security Authority and the Zimbabwe Manpower Development Fund face similar payment terms for their respective US dollar debts, albeit with smaller overall amounts.
Concurrent creditors, including trade and other suppliers, are owed US$4.4 million and ZiG453,972.
Power utility ZESA will receive full payment of its outstanding balance by the end of May 2025, while remaining concurrent creditors will receive 25 percent by the end of May 2025, with subsequent ZiG balances cleared over three months and US dollar balances over twenty-four months.
With BETA intending to pay substantial amounts by the end of next month (May 2025), it strongly suggests the potential involvement of new investors, as generating such significant funds while not currently operating would be exceedingly difficult, according to some market analysts.
This move hints at a possible fresh capital injection to facilitate debt payments and the resumption of operations.
BETA voluntarily entered corporate rescue proceedings on 30 December 2024, with Mr Tinashe Rwodzi appointed as the corporate rescue practitioner.
The process, governed by Zimbabwe’s Insolvency Act, aims to rehabilitate the company through comprehensive restructuring to avert liquidation.
In its decision, the board noted that despite the challenges, BETA possesses a reasonable prospect of recovery, buoyed by strong demand for its products within the ongoing construction boom.
The corporate rescue initiative seeks to establish the necessary time and framework to overhaul the company’s operations and finances, ultimately ensuring its long-term viability and its capacity to fulfil obligations to creditors, including customers awaiting pre-paid orders.
BETA has a brick production facility in Mount Hampden, Harare, and a concrete roof tile plant.
Prior to the corporate rescue proceeding, the company was developing a new, larger plant in Melfort in Goromonzi District with the capacity of moulding approximately 180 million bricks per year.
herald
