The government has announced the reconstruction of Hwange Colliery Company Limited which will see the administrator mandated to spearhead the turnaround of the entity, taking control of the struggling coal mining firm.
The government has a 42% stake in the entity and in terms of the Reconstruction of State-Indebted Insolvent Companies Act, the responsible minister has powers to issue a reconstruction order if it appears to him that by reason of fraud or mismanagement, a state-indebted company is unlikely to be able to make any repayment of a credit made to it from public funds.
The development means that the administrator will take control of the firm while the current Juliana Muskwe led board has been stripped of its powers.
According to the latest government gazette, DBF Capital co-founder, Bekithemba Moyo has been appointed the chief administrator and will be assisted by commercial lawyer, Mutsa Remba together with Great Dyke Investments Chief Operating Officer, Munashe Shava.
The coal mining firm which has been dogged by corporate governance deficiencies is reported to be insolvent and owing the government in excess of $150 million.
The situation has been compounded by the firm’s defaulting on the scheme of arrangement it entered into with creditors.
The reconstruction of the company has also empowered the administrator to raise funds in any way without the authority of the shareholder for the purpose of reconstruction, subject to the rights of the creditors of the company.