Fossil Mines, the majority shareholder in Khaya Cement, has been pushed out of the cement manufacturer following a crucial creditors’ meeting held on Wednesday.
Khaya Cement has been struggling to stay afloat since being placed under restrictive measures by the United States, leading to a drying up of credit lines and the withdrawal of key funders.
The company was placed under corporate rescue in December last year.
The creditors’ meeting marked the first step in a roadmap to resuscitate the embattled cement manufacturer.
Despite significant financial challenges, a revival plan presented by corporate rescue practitioner Bulisa Mbano was approved by creditors and investors.
“The meeting went on well, and it is our hope that the resolutions for the rescue plan will be implemented in accordance with our timelines for the benefit of investors and creditors,” Mbano said
Engagement with creditors has been identified as a crucial component in facilitating the company’s revival.
“It is our hope that what we have managed to gather today will set the tone towards the revival of the entity. Of course, there are challenges, but engagements are key in finding each other and getting to real issues for the revival of the entity,” Mbano added.
The high-turnout meeting of creditors and investors also marked the beginning of efforts to secure cement availability and self-reliance in Zimbabwe.
In 2022, Fossil Mines acquired a 76.45% stake in the then Lafarge Cement Zimbabwe Limited from Associated International Cement Limited, a subsidiary of the Holcim Group.
The company was later rebranded as Khaya Cement.
However, shortly after completing the acquisition, the United States imposed sanctions on companies and individuals linked to Fossil Mines.
The U.S. Office of Foreign Assets Control (OFAC) designated Fossil Agro, Fossil Contracting, and Obey Chimuka, leading to financial constraints that severely impacted Khaya Cement’s operations.
