Fresh capital discussions delay Beta Bricks restart
The reopening of BETA Bricks, initially slated for the end of last month, has been postponed as negotiations with three potential investors regarding capital injection into the company have failed to conclude within the expected timeframe.
Sources indicated that engagement with a “lead” potential investor is ongoing. After exchanging initial drafts of the shareholder agreement, delays arose on the investor’s side.
Regarding the second option, BETA, which was also in the business of producing quarter stones and concrete tiles, awaits feedback on its request for an improved offer from the investor.
A local institutional investor with “substantial financial resources” has also signed a non-disclosure agreement (NDA) with the corporate rescue practitioner.
The investor has requested specific information to facilitate their assessment and subsequent offer or proposal.
“While there are offers from investors, the negotiations are taking time and the initial reopening schedule for the plant will not be met,” said one source who requested not be named because is not authorised to talk to the press.
According to the latest report on the company’s debts, BETA owes about USS$8,7 million to clients for pre-paid orders of bricks, roofing tiles, and aggregates, which the company plans to settle in bricks over the next 18 months.
The report also details the debt and payment plan for other creditors. FBC Bank is the largest single creditor, with a total outstanding amount of approximately US$10 million.
As the sole secured creditor, FBC was scheduled to receive full repayment of US$4 million by the end of May 2025. The remaining debt will be settled over a four-year period, following a three-month moratorium, according to the report.
Preferential creditors, primarily employees, are owed approximately US$1,2 million and ZiG1,23 million.
The payment plan prioritised 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 (ZIMRA) owes the largest sum, at US$1,26 million and ZiG279,537 million.
The ZiG debt is scheduled for repayment within two months, while 50 percent of the US dollar portion was to be paid by the end of May 2025, with the balance settled over four months.
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.
Other 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 24 months.
BETA voluntarily entered corporate rescue proceedings on December 30, 2024, with Mr Tinashe Rwodzi appointed as the corporate rescue practitioner.
The process, governed by Zimbabwe’s Insolvency Act, aims to revive the firm through comprehensive restructuring to avert liquidation.
In its decision, the board noted that despite the challenges, BETA has a reasonable prospect of recovery, buoyed by strong demand for its products, supported by 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.-herald
