Khayah to now court investors after EGM approves ZSE delisting
HARARE – Khayah Cement Limited’s corporate rescue plan is now proceeding according to plan after shareholders approved the delisting of the entity from the Zimbabwe Stock Exchange (ZSE).
Khayah Cement, formerly Lafarge Cement, rebranded in May 2023, but has since faced significant operational hurdles. Frequent mechanical breakdowns, particularly in critical areas like the kiln plant and Vertical Cement Mill, have disrupted production. The aging kiln’s need for refurbishment has further reduced output. Sales volumes have also declined over the past few years. Moreover, US sanctions on the company’s major shareholder, Fossil Group, have restricted access to funding, worsening Khayah’s financial struggles.
The company is also saddled with a legacy debt of $42.9 million, including interest, inherited from Holcim Group over seven years ago. This longstanding loan has severely strained the company’s finances, ultimately leading to its placement under corporate rescue earlier this year, with High Court approval to implement a rescue plan.
Grant Thornton Zimbabwe’s Bulisa Mbano was appointed as the firm’s corporate rescue practitioner. He told FinX that, “In terms of the plan, shareholders have approved the delisting of the company from the ZSE.”
Following the shareholders’ approval of the delisting, Mbano is set to invite investors into the business to dilute Fossil Group, which has been placed under sanctions. This move will bring in new investors and help alleviate the company’s financial distress. “Next week, I will flight an invitation tender to potential investors to the business,” Mbano added.
The corporate rescue plan is unfolding according to the practitioner’s roadmap. A key milestone achieved is the operationalization of the grinding mill, enabling production to resume. The next critical step is refurbishing the kiln, which requires US$15 million in funding.
For short-term financing needs, the company has secured over US$1 million out of the US$1.5 million target.
Moving forward, Mbano emphasized that restructuring creditors’ claims and redefining shareholder dynamics will be key priorities to ensure the company’s long-term viability.-finx
