HARARE-JSE listed PPC which has a secondary listing on the ZSE and with interest spanning across across the sub Saharan region including Zimbabwe, has said it welcomes the liberalization of the exchange rate in Zimbabwe which it expects to yields lower inflation and reduce the prevalent forex premium in the market.
In an update on the Zim operation regarding the recent monetary policy measures which introduced market shaking measures such as a new currency and a floating exchange rate, the company said it has remained remained resilient despite the challenges in the operating environment experienced over the last 12 months.
In the statement the company said from its reported $63 million cash balance as at September 2018, 3 had already been shed off as a result of a debt settlement transaction done as at end of February.
The company said the forex market rate of 1:2.5 between the USD and the RTGS$ applies only to a portion of the $60 million amounting to between $30 million and $35 million while the remaining balances together with $16 in outstanding dividends and $5 million rights offer proceeds, qualifies as legacy debt due to PPC RSA which is awaiting repatriation.
According to the MPS all foreign liabilities or legacy debts and declared dividends, will be treated separately after registration of such transactions with the exchange control department of the RBZ.
Earlier in the year PPC reported that it is managing the Zim risk associated with repatriation and forex shortages through placement of dividends and other related cashflows in other investments such as bonds.
The company also said it was improving on the ratio of local input supplies to minimize the reliance on new capital injection from the Group. The Group had since rationed its exposure by inserting limits to the amount loaned to Zimbabwe.
In the latest statement PPC said its Zim unit continues to follow a rigorous approach to liquidity management and cash preservation as highlighted in our update on 5 February 2019.
Some of the initiatives include further improvement of local input sourcing to 90%, increasing exports to neighbouring countries, continuing with clinker imports from South Africa and shares purchases of PPC on the Zimbabwe Stock Exchange.
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