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RioZim faces corporate rescue

by Staff reporter
28 Sep 2022 at 06:01hrs | Views
A TRADE union has given the Zimbabwe Stock Exchange-listed resources outfit RioZim a seven-day ultimatum to recapitalise and settle outstanding salaries or face administration.

In a letter addressed to RioZim chairperson Saleem Rashid Beebeejaun, the Zimbabwe Diamond Mineral and Allied Workers Union (Zdamwu) claimed that for too long, workers at the multi-resource operation had lived on a promise that their plight would be addressed, but the firm continues sinking deeper into abyss.

Zdamwu general secretary Justice Chinhema said the union had been left with no option but to invoke relevant legislation in order to save workers.

He said RioZim was in financial dire straits, and unable to meet its obligations.

Corporate rescue involves facilitating the rehabilitation of a company that would have hit crisis point.

RioZim controls some of the country's best known mines, including Cam & Motor Mine, Renco Mine, Empress Nickel Refinery, Murowa Diamonds and Dalny Mine.

"Our members have reached a stage where they are initiating a process of applying for the placement of RioZim and all its subsidiaries under corporate rescue in terms ... of the Insolvency Act," the letter read in part.

"It has become very clear to the affected workers and other stakeholders, including the union, that the organisation is in financial distress. Workers for two years were made to understand that the Biox plant was going to be a game-changer for everyone. Months after the commissioning of the Biox plant, things have gone from bad to worse."

"Lower level workers have lost employment and the community of Chakari, where Dalny Mine was operating, is now in darkness because Zesa switched off the whole community. The situation in the RioZim group points to lack of strategic direction," Chinhema said.

He added that RioZim workers and other stakeholders shared the same view.

"There is great variance on workers welfare and the extravagance on the part of the shareholders. We have lost confidence in the shareholders of the company and its management," he wrote.

"Workers have been living in abject poverty and facing hardships under the watch of the current management which has failed to find lasting solutions to all problems that affect parties to an employment contract."

The union has given the company a seven-day ultimatum to clear outstanding salaries and recapitalise. It said if this fails, workers would proceed with the corporate rescue plan.

"All outstanding salaries will be paid in full to everyone owed within the seven days of receiving this letter. September salaries and all allowances will be paid in full at once by the last day of September 2022," said Zdamwu, adding that RioZim should make a pledge that going forward salaries would be paid in full.

"No employee will be losing his or her employment because it is said workers are too many, instead the management team should see heads rolling. A financial re-capitalisation to be made in all the entities so as to secure jobs of current workers," the letter further read.

"In the event that you fail to address the above within the stated time, or choose to ignore, we are under instruction to immediately start the process of corporate rescue, which we believe is long overdue.

"As you may appreciate, corporate rescue is meant to resurrect failing entities like RioZim. In our view, we should not wait until another mine collapses and jobs lost. Diligence requires that we act now," Zdamwu added.

The letter said Dalny Mine had closed and workers contracts terminated without packages.

RioZim spokesperson Wilson Gwatiringa refused to comment.

Source - Newsday Zimbabwe