- Khayah Cement Limited plans to delist from the Zimbabwe Stock Exchange
- The company entered voluntary corporate rescue on December 24, 2024
- The restructuring plan includes debt negotiations, cost-cutting initiatives, and asset rationalization, aiming to operate without public market scrutiny
Harare-Khayah Cement Limited, one of the leading cement manufacturers plans to delist from the Zimbabwe Stock Exchange (ZSE) as part of a strategic restructuring effort to stabilize its operations according to the latest circular issued on 28 April 2024 following the company’s voluntary placement under corporate rescue on 24 December 2024.
Khayah aims to focus on restructuring, including debt negotiations, cost-cutting initiatives, and asset rationalisation, without the scrutiny of public market expectations.
This follows the company recording poor performance since 2022 after a takeover by Fossil Contracting, which was accompanied by controversial leadership structures linked to the US sanctions list and increased costs from plant maintenance.
According to the circular, the company faces difficulties in submitting timely financial reports and covering listing fees, alongside prolonged uncertainty and illiquidity of its shares.
“Delisting is a strategic step to stabilise the company and ensure its long-term recovery by freeing up resources and reducing public market pressures,” the circular reads.
Delisting is expected to reduce costs associated with maintaining a public listing, allowing resources to be redirected toward recovery efforts.
The company has been paramount important for Zimbabwe’s construction industry for over 70 years, operating a single manufacturing facility at Manresa Works with an annual production capacity of 700,000 tonnes.
The shutdown of its kiln in 2023 forced the company to adopt a grinding station model, relying on expensive imported clinkers, which increased production costs. Unanticipated breakdowns of critical equipment, including the Vertical Cement Mill, further eroded profitability.
A significant blow came in August 2024 when a government policy shift allowed an influx of lower-priced imported cement, particularly from Zambia.
Unable to compete due to high production costs, Khayah saw a stagnation in sales volumes and revenue, compromising its viability.
Despite these challenges, Khayah has undertaken cost-containment measures, including staff rationalization, and is negotiating financing for kiln refurbishment, with recommissioning expected in the first half of 2025.
Equity Axis News
