Omega Ukama 
BORDER Timbers (Border) faces an uncertain future owing to the impact Covid-19, which has disrupted business globally.
The firm, which is under administration, had previously declared that it was out of the woods but the prospect of recovery has been hampered by the contagion.
“The Covid-19 pandemic is estimated to have a material adverse effect on Zimbabwe. As a result of the nature of the pandemic and the uncertainty surrounding the duration and extent of the lockdown restrictions, the company’s future profitability cannot be presently ascertained,” Peter Bailey, Border’s judicial manager, said in the company’s trading update for the nine months to March 31, 2020.
“The economic environment continues to face many challenges, because of the deteriorating macroeconomic fundamentals characterised by a weakening local currency and the re-emergence of hyperinflation.
“In addition, the global economies experienced the devastating effects of the Covid-19 pandemic, which resulted in lockdown measures that affected both our local and export markets,” he said.
Further, Bailey said no finalisation has yet been reached from ongoing discussions with the other party to its International Centre for Settlement of Investment Disputes (ICSID) claim and with government.
“Accordingly, the company will remain under judicial management for the foreseeable future”.
In July 2015, the company was awarded a US$25 million settlement as the outcome of an ICSID arbitration on government’s expropriation of its estates, in violation of a Bilateral Investment Protection and Promotion Agreement between Zimbabwe and Germany.
However, the ICSID tribunal made a separate arbitration award granting the same relief to another party in relation to the same expropriated land. Consequently, the separate awards provide that the awards should be apportioned among the claimants.
Meanwhile, Bailey said lumber production was higher during the period under review compared to the same period last year “due to the enhanced production processes at the Charter sawmill”.
He said the company saw a decline in production and sales volume of treated poles compared to the same period in the prior year.
“This was because of lower demand during the first half of the current financial year,” Bailey said.
He said the company’s revenue saw positive improvement compared to prior comparable period “mostly driven by better average selling prices on both lumber and poles”.
“Loss for the year has been caused mainly by unrealised exchange losses primarily from a foreign loan, the net unrealised exchange loss amounts to $68 932 187,” he said.
Border was placed under judicial management in January 2015 after failing to service debts to several financial institutions amounting to $20 million.
