Fresh capital discussions delay Beta Bricks restart

The long-awaited reopening of BETA Bricks has been delayed due to unresolved negotiations with three potential investors who were expected to inject capital into the company. Initially scheduled for the end of last month, the reopening has now been postponed, as talks with a key investor and other interested parties failed to conclude within the expected timeframe.

Sources familiar with the situation revealed that while engagement with a "lead" potential investor remains ongoing, delays arose after the initial drafts of the shareholder agreement were exchanged. The investor's side has yet to finalize the terms, contributing to the setback. In addition, BETA is still awaiting a response to a request for an improved offer from another investor, which has further complicated matters.

A local institutional investor, described as having "substantial financial resources," has also signed a non-disclosure agreement (NDA) with BETA's corporate rescue practitioner. The investor is currently reviewing specific information to facilitate their evaluation and subsequent proposal. However, while offers have been made, the pace of negotiations has been slower than expected, resulting in the company being unable to meet its initial reopening schedule.

"While there are offers from investors, the negotiations are taking time and the initial reopening schedule for the plant will not be met," said a source who requested anonymity due to their lack of authorization to speak with the press.

BETA Bricks, which has been grappling with financial challenges, owes a significant amount of money to various creditors. According to the latest report on the company's debts, the company owes around US$8.7 million to clients for pre-paid orders of bricks, roofing tiles, and aggregates. The company plans to settle these debts by delivering the products over the next 18 months.

The company's largest creditor, FBC Bank, is owed approximately US$10 million. As the sole secured creditor, FBC was scheduled to receive US$4 million by the end of May 2025, with the remaining debt to be paid over a four-year period after a three-month moratorium. Employees and preferential creditors are also owed significant sums, with employees owed about US$1.2 million, which will be settled over the next few months.

Statutory bodies, such as the Zimbabwe Revenue Authority (ZIMRA), are among the creditors, with ZIMRA owed US$1.26 million. The company is also negotiating terms with other concurrent creditors, including suppliers and utility providers like ZESA.

BETA Bricks entered corporate rescue proceedings on December 30, 2024, following financial difficulties. Mr. Tinashe Rwodzi was appointed as the corporate rescue practitioner, and under Zimbabwe's Insolvency Act, efforts are being made to restructure the company and avoid liquidation. Despite the ongoing financial struggles, the company's board has expressed optimism about its future, citing strong demand for its products driven by the country's construction boom.

The corporate rescue process is designed to provide BETA with the time and framework needed to restructure its operations and finances, ultimately ensuring its long-term viability and ability to fulfill obligations to creditors and customers. With the construction sector continuing to grow, BETA remains hopeful that the necessary investments will be secured, enabling the company to resume operations and regain stability in the near future.