Makomo Resources exits corporate rescue, regains financial stability

MAKOMO RESOURCES, a coal mining firm in Matabeleland North has successfully exited corporate rescue processes after settling its obligations to creditors noting that it has regained financial stability.

The corporate rescue processes were completed on 27 February.

Corporate rescue, also known as business rescue or restructuring, is a legal framework designed to assist financially distressed companies in Zimbabwe to restore solvency and continue operations.

The process aims to balance the interests of creditors, shareholders, employees, and other stakeholders while preserving the economic value of the company.

At one point Makomo Resources was one of the leading companies contracted by ZPC to supply Unit 7 and 8 with coal for production of electricity in the country.

It also had plans to build a 600-megawatt power station in Hwange.

Operating south-east of Hwange town, Makomo was established more than a decade ago and immediately grew to be a leading producer of coal alongside Hwange Colliery Company.

However, a few years ago it went under corporate rescue after running into financial and operational challenges.

In a notice, Mr Bulisa Mbano, the Lead Corporate Rescue Practitioner said the mining firm is now out of the woods.

He said the restructuring and reorganisation of Makomo Resources is complete.

“Notice is hereby given to the pre-Corporate Rescue creditors and members of Makomo Resources (Private) Limited that the Company’s restructuring and reorganisation has been successfully completed. Through this process, Makomo Resources settled its obligations to creditors and restructured its financial position, ensuring that it is no longer in financial distress,” he said.

Mr Mbano said with the transition, the board and management will fully regain control of the company’s operations upon the completion of the ongoing handover process.

“We extend our sincere gratitude to the board, management, staff, creditors, the Ministry of Mines and Mining Development, Zimbabwe Power Company, Zimbabwe Electricity Transmission and Distribution Company, and all other stakeholders for their unwavering support throughout the Corporate Rescue process.

“Under our guidance, the company has regained financial stability, and we are confident that Makomo Resources is now well-positioned for future success. We wish the board and management continued growth and prosperity as they create value for stakeholders and contribute to the nation’s economy.”

Makomo Resources is a coal mining company in the Bulawayo Mining District of Zimbabwe, with its mineral resource at Entuba Colliery, which is situated approximately 17 kilometres from the Hwange, Matabeleland North province of the country.

Its concession covers 7 000 hectares, which enables the mining concern to carry out open cast mining for the next 30 years at one million tonnes per annum plus another 100 years of underground mining.

The mining sector is a key player in the country’s economy, contributing more than 60 percent of Zimbabwe’s export receipts and attracting more than 50 percent of foreign direct investment (FDI).

The sector also contributes about 13 percent to the Gross Domestic Product, as well as generating significant downstream business and revenue injection to the fiscus through taxes.

-chroncile