PRIVATE investors in debt-ridden Hwange Colliery Company Limited (HCCL) have been left in the dark over the fate of their investments nearly a decade after the coal miner was placed under reconstruction, with no current financial statements, annual reports or clear timeline for the process, the Zimbabwe Independent can reveal.
The coal giant, which was saddled with debts estimated at more than US$150 million, was placed under reconstruction in 2018 after years of financial distress.
It was subsequently suspended from trading on the Zimbabwe Stock Exchange (ZSE) and ceased trading on the London Stock Exchange and Johannesburg Stock Exchange.
Eight years later, questions remain over the company’s financial position, ownership structure, operations and prospects for emerging from reconstruction.
Businessman Nicholas van Hoogstraten, whose investment vehicle Messina Investments holds just over 30% of HCCL, this week said private shareholders had received no meaningful updates on the company.
“We are not aware of any shareholder changes at Hwange, where the government holds just under 37% on behalf of the ‘people of Zimbabwe’, and I still own just over 30%,” Van Hoogstraten said.
“We have had no ‘official’ news or updates, and we have no knowledge of who is ‘controlling’ the company or what is happening on the ground.”
The government acquired the bulk of its stake in 1993 when Van Hoogstraten donated shares to the state.
At the time HCCL was placed under reconstruction, other private shareholders included Meikles Steel (9,76%), London Register (6,87%), the National Social Security Authority (6,45%), Hamilton and Hamilton Trust (4,9%), and local authorities and pension funds (1,2%), among others.
An investigation by the Independent into the company’s current status found that its website carries no recent annual reports, financial statements or substantive updates on the reconstruction process.
The reconstruction has also been dogged by legal battles.
Van Hoogstraten opposed the initial reconstruction order at the High Court, while Justice, Legal and Parliamentary Affairs minister Ziyambi Ziyambi subsequently sought to have the process confirmed.
In 2020, Ziyambi filed an application at the High Court seeking confirmation of the reconstruction order. The application was dismissed with costs, prompting an appeal to the Supreme Court.
The Supreme Court subsequently dismissed the appeal with costs under case number SC67/22.
In its judgment, the court said the appeal was bound to fail because “the foundation upon which it is predicated does not exist”.
Despite the protracted legal disputes, the reconstruction has continued.
In 2022, Ziyambi further extended the reconstruction, arguing that HCCL lacked the capacity to clear its massive debt.
The lack of clarity now extends to the company’s financial requirements.
Questions sent by the Independent to the Ministry of Mines and Mining Development seeking an update on HCCL’s financial position were referred to the Ministry of Justice, Legal and Parliamentary Affairs.
“Please note that Hwange Colliery Company is currently under reconstruction in terms of the Reconstruction of State-Indebted Insolvent Companies Act,” the Ministry of Mines and Mining Development said.
“Accordingly, all media inquiries relating to the company and its operations should be directed to the Ministry of Justice, Legal and Parliamentary Affairs, which is responsible for managing the reconstruction process.”
The Ministry of Mines also said it did not manage HCCL’s day-to-day affairs during the reconstruction period.
“The Ministry of Mines and Mining Development, therefore, does not manage the day-to-day affairs of Hwange Colliery during the reconstruction period,” it said.
Justice Ministry permanent secretary Vimbai Nyemba said the company required US$500 million to revive when it was placed under reconstruction in 2018.
“Operational responsibility now rests with the appointed administrator, while the minister retains a policy role,” Nyemba said.
She said the US$500 million figure was historical and that HCCL’s current recapitalisation needs had to be determined by the administrator.
“The historic figure from 2018 was US$500 million, but to have an authoritative figure to date in 2026, the administrator needs to come up with a new recapitalisation requirement,” Nyemba said.
She said there was no statutory deadline for ending the reconstruction.
“The process has got no statutory timelines, but in terms of section 35 of the Reconstruction of State-Indebted Insolvent Companies Act, if at any time the administrator notifies the minister in writing that the purpose of the reconstruction order has been fulfilled, the process will then come to an end,” Nyemba said.
The government’s turnaround strategy, she said, was centred on boosting production and using internally-generated cash rather than injecting capital directly.
“Instead of direct cash injection, the strategy has been to increase production, generate cash, reinvest cash, increase production further and repay remaining debt,” Nyemba said.
HCCL administrator Munashe Shava had not responded to questions by the time of going to print.
The Independent sought clarity on HCCL’s current debt quantum, production and financial position, shareholder communication and whether there was any roadmap for bringing the long-running reconstruction to an end.
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