Chrome smelting company, MonaChrome Private Limited’s full scale revival, is now anchored on the payment of $4 million to its creditors by the new investor, NK Trading, after shareholders and creditors approved a scheme of arrangement. The German investor is expected to start production at the Selous based smelter once modalities around payment of creditors are concluded.
“We did a scheme of arrangement, which has since been approved. We are now waiting for the bidder to make a payment. “The revival of Monachrome is realistic considering that chrome prices have been on the upward trend, which coincides with the current revival plans,” Monachrome judicial manager Christopher Maswi of Fairvalue Management Consultancy said.
Creditors in 2015 accepted a $4,5 million bid from the German investor, NK Trading, which is now looking at restoring fortunes of the chrome smelting company. Prior to the approval of NK Trading, two local investors had formally submitted bids worth about $4,3 million each for the acquisition of the company and this saved the company from the jaws of liquidation.
MonaChrome Private Limited had been engaged in a discussion to offset what is owed to the now defunct Kingdom AfrAsia Bank as efforts to resume the company’s operations. Mr Maswi said an agreement with AfrAsia Bank was reached and the scheme of arrangement was accepted and approved by both creditors (secured and unsecured).
NK Trading had previously failed to submit a formal bid upon the judicial manager’s request and they highlighted that they were still finalising discussions with their potential partners. Key to their proposal at that time was the granting of a licence to export raw chrome by the Ministry of Mines and Mining Development, which was not granted by then.
The lifting of the ban on export of chrome is expected to go a long way in ensuring viability of MonaChrome. Mr Maswi said the lifting of the raw export ban by Government and the current rise in chrome prices presents a huge opportunity to mine chrome, export and build working capital to fund a plant restart. MonaChrome was formed in 2008 when it was initially registered as a shelf company under the name Monawood Trading (Pvt) Ltd.–herald