Portnex in huge debt, faces collapse and forex externalisation allegations

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OWEN MATAVA in Kwekwe

South Africa-based firm, Portnex International, which took over operations at the Zimbabwe Mining and Smelting Company (Zimasco) West plant in Kwekwe following a USD$12 million lease agreement four years ago, is on the verge of collapse and may even fail to payoff several creditors amid allegations that the ferrochrome producer mismanaged several funds and is now struggling to remitt back to Zimbabwe millions of US Dollars from export proceeds.

It is being alleged that the missing funds, were earmarked for mining and production processes aswell as to settle creditors payments including workers salaries. Information obtained shows that the employees were last paid their dues in February this year.

Highly placed sources alleged that the company diverted more than USD10million towards a new project in SA in anticipation of making a quick return and remitt back the foreign currency to Zimbabwe for its operations.

However, the SA project, Elmasat Refractories, has all but failed to take off the ground putting the company’ operations in Zimbabwe into disarray, sources further alleged.

When reached for a comment, Portnex kingpin, Freiki Laubscher failed to answer to questions sent to him by midlandsnews as he referred this publication to the company’s legal division who inturn enlisted the services of lawyer, Claudious Nhemwa whom they described as the company’s Reconstruction Manager.

”You will note that we will not be able to respond on the current state of the company and payments being made as it is in Corporate Rescue. The Corporate Rescue Practitioner, Claudious Nhemwa is better placed to respond.

”The financial background of the company has to be understood from its revenue generation capacity, for a company that had a monthly revenue generating capacity of 3.5 million, the size of its debts are common to the industry, for reference, one may look at the debts Zimasco had when it entered into Judicial Management as it was known then.

”You will also note that Zimasco came out of Judicial Management a stronger company which was and remain our hope that Niarchos will also come out a stronger company from Corporate Rescue”, said Portnex in an email response.

While the company refused to answer direct to questions sent by midlandsnews, sources claimed Zimasco is no longer interested in renewing the Portnex lease as it is reportedly considering another suitor with strong ferrochrome operations background.

It is reported that two weeks ago, the two parties Zimasco and Portnex, went on an assets verification exercise at the West Plant in Kwekwe and this could have signalled the end of the five year relationship which is due to expire on December 9 this year.

Portnex had entered into a lease agreement through its subsidiary Buckler Investments in 2016.

The SA based firm is reportedly struggling to payoff several creditors chief among them ZETDC’ USD6million and ZWL 30million, JRG around USD 3million, Zimasco’ lease fees, Mines Machinery for hire earthmoving machinery and its employees.

Several questions are now being asked on the company’s capacity to payoff its creditors as it is being alleged that its operations arm Niarchos Investments do not own any meaningful property both moveable and imoveable with reports that it only owns some computers, office printers and one forklift.

It is further claimed that Niarchos was leasing all operations vehicles from a local company Nashwan Investments which insiders claimed was also a subsidiary of Portnex.

However another source claimed the company is owed close to USD12million by the Reserve Bank of Zimbabwe and could be banking on the transaction to payoff some of the creditors.

Efforts to get a comment from RBZ Head of Public Relations, Isaac Muzambi proved fruitless as he was said to be off duty.

In a sign that all is not well between Zimasco and Portnex, it is alleged that the Zimbabwe giant ferrochrome producer has since blocked the movement of chrome ores valued at around USD 500 000 from being exported by Niarchos, this until the company settled the lease fees owed to them.

Further allegations are that Portnex misled the company’ Reconstruction Manager into believing that Buckler which has a lease with Zimasco and Niarchos its operations wing had assets in Zimbabwe which could be sold to payoff creditors. However, investigations show that apart from office equipment, a folk lift and 12 light vehicles owned by Nashwan Investments, the company do not own any other assets which could be attached by creditors inorder to recover the amounts owed should Portnex fail to payoff the creditors.

Repeated efforts to get a comment from Portnex Reconstruction Manager, Nhemwa proved fruitless at the time of publishing.

However, in 2016, Portnex announced that the resuscitation of Zimasco’ West Plant three furnaces, will see the then new investor recalling 800 former Zimasco workers back to work which the SA firm never did.

The company claimed it exports ferrochrome to various European markets adding that it had targeted to process 240,000 tonnes of raw chrome per annum which translate to 100,000 tonnes of ferrochrome over the same period.

Portnex described itself as a global reductant-supplier to a number of consumers of a broad spectrum of carbon products and its operations had expanded to include the marketing of strategic commodities such as chrome ore, ferrochrome, thermal coal, lean coal, anthracite, coking coal and metallurgical coke.

The company further claimed it had a presence in Turkey and in 2015 offered consultancy services to Hwange Colliery Company Limited which was under the management of former Mines deputy minister, Fred Moyo.

Moyo together with former Hwange Colliery Company, head of procurement, Quedisani Sithole allegedly have vested interests in Portnex.

The Zimasco and Portnex deal was signed during Moyo’ tenure as deputy minister of Mines.