AHL needs K20 billion for restructuring
Restructuring of financially constrained AHL Group would be delayed due to what management has described as circumstances beyond control in securing financing for the process.
The firm needs in excess of K20 billion to conclude the process, which would cater for pension arrears, retrenchment arrears and other restructuring costs.
Government moved to the company, in which it holds majority stakes, through Agricultural Development and Marketing Corporation (Admarc), as it has been facing financial calamities and has proven difficult to sustain.
According to a letter from the group’s acting Chief Executive Alfred Nkhono which we have seen, the restructuring has delayed because the board was identifying resources for payment of terminal dues.
“The board is doing its best to conclude the financing for the restructuring and would in due course advise the firm timing of implementation of the restructuring,” reads the circular.
AHL Board Chairperson Rhino Chiphiko said the firm would require K3.7 billion to settle pension arrears, K2.6 billion for retrenchment arrears and K14.3 billion for restructuring the group’s companies.
He added that they were planning to get the money from shareholders who are the government through Admarc and others but they had delayed to provide the money.
“I cannot be definite as to when we will be able to secure financing because we are consulting the government and other shareholders to find out as to when they will come up with the finances but we are hopeful that, in the next three months, we should be done,” he said.
Commenting on the matter in an earlier interview, Economist from the Malawi University of Business and Applied Sciences Betchani Tchereni said the liabilities should not be transferred to the government, arguing the loans were not a result of government actions.
He advised the group to look at a turnaround strategy by thinking of businesses which are viable and stop businesses which are not viable and reorganize liabilities and their repayments.
AHL is a group of companies which focuses its trade on agricultural produce.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.