Border Timbers, top shareholder reach consensus
BORDER Timbers Limited says it has reached an agreement with majority shareholder VP Claimants over the apportionment of the final awards compensating it for the loss it suffered after part of its land was acquired by the Government for resettlement.
The firm said the agreement will facilitate its exit from judicial management.
Over the years, Border Timbers and VP claimants had failed to reach an agreement on how to split the US$125 million awarded to them by the International Centre for Settlement of Investment Disputes (ICSID) over the land that was acquired by the Government in 2005.
Following the land acquisition, Border Timbers associates filed a request for arbitration by ICSID against the Government of Zimbabwe in terms of the investment treaty between Switzerland and Zimbabwe.
Claims were also brought against the Government in separate arbitral proceedings by the company’s (then) majority shareholder, the von Pezold Family (“the VP Claimants”) under the same bilateral investment treaty as well as under a bilateral treaty between Germany and Zimbabwe.
However, disagreements between the two claimants had delayed the company’s exit from judicial management as well as engagement with the government.
“As a result, the company is seeking shareholder approval by way of a special resolution to allow it to enter into the Proposed Settlement Agreement to apportion the Final Awards,” the company said in a circular to shareholders.
According to the circular, the pre and post award interest relating to the compensation shall be split in the percentages of 57,5 percent to Border Timbers and 42,5 percent to VP Claimants.
In monetary terms, this means Border Timbers shall be entitled to US$71 million while the VP Claimants would receive US$52 million.
Border Timbers, under judicial management and with the continued support of major shareholders, saw recovery in revenues and the company has been able to pay off most of the pre-judicial management debt.
“The company has returned to profitability and should be in a position to be removed from judicial management. Upon exit from judicial management, the company should be able to resume trading its shares on the Zimbabwe Stock Exchange (ZSE),” said the company.
According to the circular, the judicial manager Peter Bailey considers that the purpose of judicial management had been fulfilled and that the order for final judicial management granted by the High Court of Zimbabwe should be terminated to return the company to the management and control of its directors.
“The Judicial Manager intends to make an application to the High Court of Zimbabwe for an order terminating the Company’s judicial management soon.”
The ICSID is a World Bank-affiliated international appeals court which dismissed Zimbabwe’s application to annul an award granted to Border Timbers and other claimants by the court following government’s compulsory acquisition of farms and forestry plantations at the height of Zimbabwe’s land reform.-The Herald
