Cement company PPC Zimbabwe has acknowledged receipt of US $ 11.2 million from the Reserve Bank of Zimbabwe under the Inherited Debt Repayment Facility.
Debt accumulated due to cash flows generated in Zimbabwe by foreign entities which could not be repatriated to foreign suppliers due to foreign exchange shortages.
These inherited external debts, which were assumed by the central bank according to circular eight of 2019, cover the period between January 2016 and February 2019.
In 2019, the central bank called on all those whose stranded funds were approved to transfer the respective local currency to the central bank by April 30, 2020 through normal banking channels.
PPC Africa Group CEO Roland van Wijnen confirmed the development expressing optimism about debt clearance by the end of next year.
“The Reserve Bank of Zimbabwe continues to honor its obligation to settle PPC Zimbabwe’s debt from legacy funds with an additional $ 11.2 million paid in FY 21. Management expects that the debt is fully repaid in fiscal year 22, “he said.
At the time the funds were blocked, PPC Zimbabwe Ltd was grappling with an inherited $ 21 million debt owed to PPC South Africa.
The local unit was left with an equivalent of US $ 64.2 million that was owed to its parent company after failing to remit the proceeds of the rights issue and other amounts owed to the manufacturing group of building materials listed on the Johannesburg Stock Exchange.
Since then, several companies have confirmed the maintenance by the central bank of the commitment made.
Meanwhile, during the group’s fiscal year ended March 31, 2021, PPC Zimbabwe’s cement volumes increased by around 10%, supported by ongoing infrastructure projects.
In functional currency, PPC Zimbabwe’s revenue increased by 251%, with the company remaining financially self-sustaining and declaring a cash dividend of US $ 4.4 million to its parent company in December 2020.
After year-end, an additional dividend of US $ 2.6 million was paid to the parent company.
The group reported a net fair value gain on Zimbabwe’s financial assets of Rand 256 million and a net fair value loss on Zimbabwe’s stranded funds of Rand 17 million.
PPC said the available cash from operations amounted to R 1,022 million while cash generation benefited from improvements in EBITDA, reduced absorption of working capital and lower financial costs paid.