SHABANIE Mashava Mines Holdings (SMM) is in negotiations to sell its 43 percent stake in conveyor belts manufacturer, General Beltings Holdings (GB).
The troubled asbestos producer, which was mothballed 15 years ago, and has been under administration for more than a decade, has been selling assets to clear its huge debt to pave way for the resumption of operations.
“Shareholders and the investing public are hereby advised that the company has received notice that its major shareholder SMM has entered negotiations for a sale and purchase agreement with a third party for the entire 43,22 percent shareholding in the company,” GB said in a statement a fortnight ago, adding that “the third party is an investment vehicle representing a consortium of
local business people”.
In February this year, Afaras Gwaradzimba, SMM’s administrator said a government-sanctioned scheme would see the company disposing of major assets, including massive land and properties in the Zvishavane and Mashava towns.
“The scheme’s main purpose is to raise funds in order to clear the company’s indebtedness, and to enable it to resume its mining operations, which are its core business,” Gwaradzimba said.
Government became a major shareholder in the firm after a widely contested take over from businessman Mutumwa Mawere.
Meanwhile, GB has lately seen a decline in business due to subdued demand amid hyperinflation, which has eroded purchasing power across the board. The company reported a 36 percent decline in total volumes to 636 metric tonnes during the year ended December 31, 2019 from 995 metric tonnes in the previous year.
“Both chemicals and rubber divisions reported reduced volumes when compared with prior year due to depressed downstream demand although there were significant recoveries in the later part of the year at the rubber division,” Godfrey Nhemachena, GB’s chairman said earlier this year.
The company says it has also failed to fill some orders due to foreign currency shortages in Zimbabwe. The company has over the years faced stiff competition from cheaper imports, and has faced working capital challenges, all of which has driven it into losses.
GB’s product range includes rubber-covered belting, polyvinyl chloride (PVC) belting, light-duty PVC belting, solid-woven belting, transmission belting and conveyor belt rubber skirting. Its two major customers are Anglo-American Corporation and De Beers.
The company has two subsidiaries — Pigott Maskew and General Beltings. Pigott Maskew manufactures rubber products for mining, manufacturing and construction industries.
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