Johannesburg – A Zimbawean mining company has come up with a novel way to pay for its increasing debt and the salaries of employees dating back five years.
Hwange Colliery Company Limited (HCCL) is considering selling the town of Hwange for $300m (about R3.7 billion), according to reports in the Zimbabwe media.
HCCL says a $500 million (about R6 billion) capital injection is required to pay off its and has put forward the option to sell off the town, Bulawayo 24 reported.
The company’s board appeared before the parliamentary portfolio committee on mines on Monday, during which the dire situation in the mining town was laid bare.
“We have challenges with working capital; we need working capital because the equipment is obsolete,” said Ntombizodwa Masuku, chairperson of the technical committees on operations.
Shareholders will meet the company’s board to discuss possibilities of injecting fresh working capital into the business.
Controversial British businessman Nicholas van Hoogstraten, the major shareholder in HCCL with a 26 percent stake through his investment vehicle Messina Investments, has already been approached by the coal miner’s top management for capital.
Van Hoogstraten, while renowned for his business empire, has a shady past.
In 1968 he was convicted by a British court and sent to prison for paying a gang to attack a business associate while in 2002 he was sentenced to 10 years for the manslaughter of a business rival.
The verdict was overturned on appeal and he was subsequently released, but in 2005 he was ordered to pay the victim’s family £6 million (about R102 million) in a civil case.