MILLING and timber manufacturing company Border Timbers Limited’s (BTL) bid to exit judicial management remains in jeopardy as parties involved have not yet reached agreement, almost a year beyond the anticipated time frame.
BTL was placed under provisional judicial management in January 2015 and went into final judicial management in 2016 after failing to service its debts.
The company’s exit from judicial management was anticipated last year but it would have depended on the settlement of an ongoing dispute with creditors over US$125 million awarded by the International Centre for Settlement of Investment Disputes (ICSID).
In a trading update for the six months to 31 December 2020, the company’s judicial manager, Peter Bailey, said the matter remains pending.
“No finalisation has been reached from ongoing discussions with the other party to the claim. Discussions with the government will follow. Accordingly, the company will remain under judicial management for the foreseeable future,” he said.
Production volumes for both lumber and transmission poles for the six months to 31 December 2020 stood at 28 519 with net profit before tax reaching ZW$58.1 million.
During the period under review, lumber production was lower compared to the prior year due to disruptions in production and logistical bottlenecks caused by Covid-19 lockdown restrictions in the first quarter of the financial year.
Demand for lumber remains very high both in the local market and the export market.
“Treated poles reflect a decline in production and sales volume compared to prior year, this was because of lower demand during Q2 (second quarter) of FY21 (full-year 2021) and the adverse effect of the Covid-19. However, measures are in place to further develop the export market with a view of increasing sales volumes,” Bailey said.
BTL hailed the business environment which remained on an improvement path mainly due to the local currency which has been relatively stable as well as inflation which registered a decline for the half-year under review. The relaxation of the Covid-19 lockdown restrictions, extension of trading hours and free movement of people improved the operating conditions and production of the business during the second quarter to December 2020.
“The gazetting of Statutory Instrument 185 of 2020 during the half year under review, on dual pricing policy was extremely encouraging on the business front as it ensured flexible business pricing strategies which significantly improved value preservation,” said Hailey.
Going forward, the company expects Covid-19 to continue taking a toll as the pandemic is not seen disappearing anytime soon, amid apprehension over the likelihood of a deadly third wave. — STAFF WRITER
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