Allied Timbers eyes $30 million loan deal

Allied Timbers eyes $30 million loan deal
Published: 29 January 2018 (669 Views)
Allied Timbers Zimbabwe is close to sealing a vendor finance transaction with Belarus that will see the country's largest timber company receiving equipment worth $30 million.

The deal, likely to be closed during the first quarter of this year, is expected to put the company on a recovery trajectory following several years of under performance resulting from mismanagement.

The facility is part of several loans Zimbabwe is getting from the Eastern European country to support productive sectors. Some of the companies that have benefited include Hwange Colliery Company Limited while negotiations were ongoing with various other state enterprises.

About two weeks ago, officials from Belarus where in the country for a famirialisation tour of some of Allied's plantations. Officials from Allied will, in the next few weeks, visit Belarus to inspect the equipment, chief executive Dr Daniel Sithole said.

"There were here and were impressed," Dr Sithole told The Herald Business. "We will be going there in the next few weeks and thereafter, we hope the transaction will be sealed, hopefully, before end of this quarter. They will supply us with modern equipment, which will help revive operations.

Allied Timbers has been recapitalising the company using own resources, but they were not enough to boost operations. "We have made some milestones using our own resources. We have expanded some of our kilns and acquired haulage vehicles. We are also in the process of resuscitating the Mutare factory and have been consistency in paying workers for the past six months."

The company employs about 1 400 workers. It was born out of the Forestry Commission in 2003 and the idea was to separate regulatory activities from commercial activities. The intention was to enable both institutions to effectively pursue their mandates, with funds from the commercial division supposed to assist in funding regulatory functions.

As such, the commercial wing gave rise to Forestry Company of Zimbabwe, later rebranded to Allied while regulatory activities were reconstituted into Forestry Commission. The company control about 60 percent of Zimbabwe's commercial forests.

- the herald

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