eBusiness Weekly
Kudakwashe Mhundwa and Prince Chidzvondo
Turnall Holdings Limited has said the group is now technically solvent after a debt restructuring exercise.
The building material company is now recording “relative success” on operations.
Turnall owed several creditors a cumulative $12 million including the Zimbabwe Revenue Authority (Zimra) $4,8 million in outstanding tax obligations as of December 2016.
It was granted eight years to clear the debt.
Finance director Samson Mavende, said the company’s solvency will help it perform better as the growing issues which have troubled the company have now been resolved.
“The debt was restructured from short term to long term; we had this debt that we were in default and were struggling to pay and we were being charged punitive interest, so we restructured it through Zimbabwe Asset Management Company (Zamco) and we are now repaying it over six years at a lower interest rate.
“We have gone one year now we still have five years to go with repaying that debt.”
He said the group is now solvent with net current assets of $2,2 million compared to net current liabilities of $11,8 million in the comparative period “and we have achieved this through a combination of a drive for profitability and the debt restructuring process,” said Mavende.
Zamco was established in 2015 with a 10-year mandate restructure non-performing loans that were threatening the banks. It has acquired bad debts amounting to over $1 billion from stressed companies that have the potential to be rehabilitated upon the injection of fresh capital.
On performance, the group’s sales volumes for the year ended December 31, 2018 rose 41 percent to 56 399 tonnes from 40 030 while turnover jumped 69 percent to $32,2 million from $19,0 million.
During the period under review gross profit increased 97 percent to $13,4 million from $6,8 million. The group’s cash generation capacity improved 290 percent from the prior year cash generation of $2 million to $7, 8 million before working capital.
Mavende said: “The increase is attributed to efficiencies associated with the increase in the throughput for the business. Management also implemented several measures to improve production efficiencies in the factory,”
Meanwhile, the group says it is started receiving business inquiries from Mozambique after the recent Cyclone Idai raked havock and destroyed property worth millions of dollars in Zimbabwe, Mozambique and Malawi.
“There is huge potential from Mozambique; I am sure we all know the impact that happened as a result of the cyclone so that is another huge opportunity for us to get foreign currency. In in fact we are now striving to make sure that we get the first move advantage because others are still trying to figure it out. But we are actually having a readily made product on the floor. Some have also started paying now for Mozambique. It’s an emergency and people need to be rehabilitated and housed,” said Turnall.
