HARARE – Khayah Cement Limited, previously known as Lafarge Cement Zimbabwe, has commenced corporate rescue proceedings to address severe financial challenges and ensure operational stability.
The decision, in line with Section 122(3)(a) of the Insolvency Act [Chapter 6:07], follows a unanimous resolution by the company’s board on 20 December 2024. Chairperson Kumbirayi Chiimba Katsande, in a sworn affidavit, outlined the urgency of the move due to mounting creditor lawsuits and financial distress caused by a series of operational setbacks.
“The board recognized the need to initiate corporate rescue proceedings to restore the company’s financial health,” Katsande stated. “This decision was informed by key challenges, including the breakdown of critical equipment like the kiln and the Vertical Cement Mill, high costs of alternative clinker supplies, and a constrained working capital environment.”
The affidavit emphasized that refurbishing the kiln—central to cement production—would significantly reduce costs and improve operational efficiency. It also highlighted other restructuring measures aimed at leveraging Khayah Cement’s valuable assets, strong market demand, and established brand reputation to ensure recovery.
Grant Thornton Zimbabwe Chartered Accountants’ Mr. Bulisa Phillimon Mbano has been appointed as the Corporate Rescue Practitioner to lead the turnaround process. In his initial statement, Mbano assured stakeholders of transparency and ongoing communication.
“The corporate rescue process is vital to safeguard the company’s future and protect the interests of creditors, employees, and other stakeholders,” Mbano said.
Legal advisors ChimukaMafunga Commercial Attorneys noted that the corporate rescue process aims to create a structured recovery plan. “This resolution demonstrates the board’s commitment to taking decisive steps to stabilize the company and ensure long-term viability,” said Norman Chimuka, a partner at the law firm.
Khayah Cement’s challenges include financial exposure to creditors, low capacity utilization, and increased competition from cheaper cement imports. Despite these difficulties, Katsande remains optimistic, citing a buoyant demand for cement and the company’s strategic assets as key to a successful turnaround.