Two Hwange Colliery Coal Limited (HCCL) board members representing British businessman Nicholas van Hoogstraten’s interests have resigned, as the company’s trading position and fundamentals continue to deteriorate.
Company managing director Thomas Makore yesterday confirmed Shingirayi Chibanguza and Ian Haruperi’s departure.
“Their resignation is effective from March 1, 2016, but they did not give reasons (for leaving),” he said.
The development also comes as Harare lawyer Farai Mutamangira resigned as group chairman last October and only to be replaced by Jemmester Chininga in an acting capacity.
As it is, only Chininga, Valentine Vera and Juliana Muskwe are now left on the board.
And as HCCL continues to struggle for viability amid a worsening debt profile, and policy-linked inefficiencies, it would seem shareholder relations have also reached or hit a cooling and workers have even approached the courts in a bid to oust executive management.
As such, the withdrawal of Van Hoogstraten’s representatives might be an indication the maverick tycoon was unhappy with the policy direction of the company and especially after the rejection of his five-year $50 million rescue package loan.
For a man, who claims to have donated much of the shares that President Robert Mugabe’s government holds in the country’s largest coal producer, it was “unusual and the first time” that the property investor had withdrawn his support for HCCL, market watchers say.
In recent years, Van Hoogstraten’s Messina Investments and several other investment vehicles has always been the second largest investor with a 30 percent stake followed by government at 36 percent.
And despite efforts to clean up HCCL’s balance sheet through a debt-to-equity conversion of the government’s $80 million statutory obligations, which will further dilute minority shareholders, the company has remained in the “pits” as demonstrated by its $19 million half-year loss to June 2015.
Apart from the debt-to-equity swap, management has also dangled another turnaround plan — already presented to major shareholders — and based on cutting its head count by 50 percent, and remodelling its business units.
This includes the restructuring of the Zimbabwe Stock Exchange-listed concern into six operating divisions namely Hwange Colliery Holdings, Hwange Coal Mining, Hwange Plant and Equipment, Hwange Coal Processing and Cokeworks, Hwange Properties and Estates as well as Hwange Hospital.
The objective is to ensure that the divisions are profitable as individual business units and that they raised capital on the basis of their balance sheets.
The giant coal miner projected production to increase to between 450 000 and 500 000 tonnes per month, boosted by additional contracted capacity.