Zimbabwe’s second-largest cement producer, Khayah Cement Limited, is facing a severe crisis and has opted for voluntary business rescue.
Despite the cement market remaining strong, the company attributes its failures to internal inefficiencies and significant losses due to frequent breakdowns. In a notice, Khayah stated:
<blockquote>
The Company is financially distressed as it is struggling to meet some of its obligations to creditors as and when they fall due for payment.”
</blockquote>
When Fossil acquired Lafarge Cement (now Khayah Cement) for US$29.7 million in 2022, the company was already deep in debt and grappling with a poorly performing plant and various operational issues, according to <a href="https://newzwire.live/cement-demand-is-strong-but-zimbabwes-second-largest-producer-in-deep-crisis-heres-why/">newZWire</a>.
Fossil inherited a debt of US$11 million from Lafarge and has been unable to repay it due to continuous plant breakdowns and operational inefficiencies.
Furthermore, US sanctions imposed on Fossil in 2022 have made it more challenging for Khayah to secure trade loans. Khayah said:
<blockquote>
Trade restrictions which were imposed by the US Government on one of the members of the consortium that purchased a controlling stake in the Company resulted in the withdrawal of service provision by financial institutions such as loans and also offshore payments.
A number of key suppliers also withdrew their services making the purchase of goods and services very expensive.
</blockquote>
The company says there’s “agitation” among creditors who want their longstanding debts paid. To prevent a run on its assets and legal action, Khayah has to seek protection through business rescue.
Khayah was also hurt by the government’s decision to temporarily allow cheaper cement imports to plug shortages. The company said:
<blockquote>
The Company could not fully match these prices on account of relatively higher production costs from the current operating model.
The result was a reduction, and ultimately a stagnation of sales volumes, revenue and operating capacity below short-term economic levels – curtailing the Company’s recovery and growth momentum.
With this came liquidity challenges given payment commitments to legacy debt which is unrelated to and does not promote viability nor continuity of the current grinding station operating model.
</blockquote>
Bulisa Phillimon Mbano has been appointed as the Corporate Rescue Practitioner for Khayah Cement Limited.
Sources reported by newZWire indicate that mismanagement was a key factor in the frequent equipment failures.
Late in 2022, the company had planned a 56-day kiln shutdown to refurbish the plant at a cost of US$7 million.
However, this process was disrupted by the management changes following the change in ownership.
The sources also claimed the board and management committees lack engineering skills, further contributing to the operational challenges.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Khayah Cement in Zimbabwe is in trouble and needs help. They owe a lot of money and can't pay back their debts. The company blames internal problems and breakdowns for their financial crisis. The company was bought by Fossil in 2022 and had a lot of debt already. U.S. sanctions and cheaper cement imports hurt their business too. Creditors want their money back and the company needs protection. The company is now under voluntary business rescue to try to fix their problems. They have appointed Bulisa Phillimon Mbano to help them. The company's mismanagement and lack of engineering skills are also causing issues.

Khayah Cement Enters Voluntary Business Rescue

Knowstics Academy has been placed under corporate rescue, with Budhama Chikamhi appointed corporate rescue practitioner, reported <a href="https://www.newsday.co.zw/local-news/article/200035480/top-private-school-put-under-corporate-rescue">NewsDay</a>.
Chikamhi’s appointment means he has replaced the school’s governing body in managing the institution.
A circular was issued on November 21, 2024, informing stakeholders about the corporate rescue. Said Chikamhi:
<blockquote>
One of the measures which was taken by the previous governing body of the school was to scrap Form Two such that students doing Form One would skip Form Two and go straight into Form Three.
I wish to advise that effective from January 2025, the school will re-introduce the Form Two stream in line with the Primary and Secondary Education ministry requirements…
The school used to offer commercial and arts subjects at Lower and Upper Six levels and these had been scrapped by the previous governing body.
Effective from January 2025, the school will be offering the subjects to provide students with appropriate choices in line with their career aspirations.
I have appointed a three-member technical committee which is chaired by Fredrick Hamadziripi, a renowned educationalist and current chairman of the Legal Undergraduate Programmes Department at the University of Zimbabwe.
</blockquote>
Chikamhi plans to work with stakeholders, such as banks and parents, to ensure the school operates smoothly.
The corporate rescue plan includes suspending legal actions, like court orders and asset seizures, to give the school time to recover.
The initiative aims to help the school regain stability and prevent it from being shut down.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Knowstics Academy, a private school, is in trouble and someone called Budhama Chikamhi is now in charge. The school will bring back Form Two classes and offer more subjects. Chikamhi will work with banks and parents to help the school. They want to stop any bad things happening to the school and help it get better. The plan is to make sure the school stays open and runs smoothly. This news was reported by NewsDay.

Corporate Rescue Latest News

Latest Jobs